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TABLE OF
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Table of
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment
No. )
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Filed by
the Registrant ý |
Filed by a Party other than the Registrant
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Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under
§240.14a-12
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NORTONLIFELOCK INC. |
(Name of Registrant as Specified In Its
Charter) |
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(Name of Person(s) Filing Proxy Statement, if other
than the Registrant) |
Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11. |
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Title of each class of securities to which
transaction applies:
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Aggregate number of securities to which transaction
applies:
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(3) |
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Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it
was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary
materials. |
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Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the Form
or Schedule and the date of its filing. |
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Table of
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(formerly Symantec Corporation)
60 E. Rio Salado Parkway, Suite 1000
Tempe, Arizona 85281
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
to be held on:
December 19, 2019
9:00 a.m. Pacific Time
Dear
Stockholder:
You are
cordially invited to attend our 2019 Annual Meeting of Stockholders
(the "Annual Meeting"), which will be held at 9:00 a.m.
(Pacific Time) on Thursday, December 19, 2019. On
November 4, 2019 we changed our name from Symantec Corporation
to NortonLifeLock Inc. This year's meeting will again be
completely virtual and conducted via live webcast. You will be able
to attend the Annual Meeting online and submit your questions prior
to or during the meeting by visiting
www.virtualshareholdermeeting.com/NLOK2019. You will also be able
to vote your shares electronically at the Annual
Meeting.
We are
excited to embrace the latest technology to provide expanded
access, improved communication and cost savings for our
stockholders. Hosting a virtual meeting enables increased
stockholder attendance and participation since stockholders can
participate from any location around the world. In addition, the
online format will allow us to communicate more effectively with
you via a pre-meeting forum that you can enter by visiting
www.virtualshareholdermeeting.com/NLOK2019 and submit questions in
advance of the Annual Meeting.
For your
convenience, we are also pleased to offer a re-playable webcast of
the Annual Meeting at investor.nortonlifelock.com.
We are
holding the Annual Meeting for the following purposes, which are
more fully described in the proxy statement:
- 1.
- To
elect the eight nominees named in the proxy statement to
NortonLifeLock's Board of Directors;
- 2.
- To
ratify the appointment of KPMG LLP as NortonLifeLock's
independent registered public accounting firm for the 2020 fiscal
year;
- 3.
- To
hold an advisory vote to approve executive compensation;
- 4.
- To
consider and vote upon a stockholder proposal, if properly
presented at the meeting; and
- 5.
- To
transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
We are
furnishing proxy materials to our stockholders primarily via the
Internet to expedite stockholders' receipt of proxy materials,
lower the cost of the Annual Meeting and help conserve natural
resources. On or about November 7, 2019, we expect to send to
our stockholders (other than those who previously requested
electronic or paper delivery) a Notice of Internet Availability of
Proxy Materials containing instructions on how to access our proxy
materials, including our proxy statement and our annual report, and
how to vote through the Internet or by telephone.
Only
stockholders of record as of the close of business on
November 1, 2019 are entitled to notice of, and vote at, the
Annual Meeting or any postponement or adjournment thereof. A list
of stockholders entitled to vote will be available for inspection
at our offices for ten days prior to the Annual Meeting. If you
would like to view this stockholder list, please contact Investor
Relations at (650) 527-8020.
Your
vote is very important. Whether or not
you plan to virtually attend the Annual Meeting, please vote at
your earliest convenience by following the instructions in the
Notice of Internet Availability of Proxy Materials or in the proxy
card you received in the mail. You may revoke your proxy at any
time before it is voted. Please refer to the "2019 Annual Meeting
of Stockholders Meeting Information" section of the proxy statement
for additional information.
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BY ORDER OF THE BOARD
OF DIRECTORS |
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SCOTT C.
TAYLOR Executive Vice President,
General
Counsel and Secretary |
Tempe, Arizona
November 7, 2019
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON
DECEMBER 19, 2019. The proxy statement and
NortonLifeLock's Form 10-K for the 2019 fiscal year are
available at
http://investor.NortonLifeLock.com/About/Investors/financial-information/Annual-Reports/default.aspx.
Table of
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TABLE OF CONTENTS
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PROXY SUMMARY
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1 |
CORPORATE GOVERNANCE
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6 |
Corporate Governance Guidelines
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Code of Conduct and Code of Ethics
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Insider Trading, Hedging and Pledging
Policies
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Stock Ownership Guidelines
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Stockholder Engagement
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Majority Vote Standard and Director Resignation
Policy
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Proxy Access
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Board Leadership Structure
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Board Independence
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Change in Director Occupation
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Board and Committee Effectiveness
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Board's Role in Risk Oversight
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Board's Role in Oversight of Company
Strategy
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Board's Role in Oversight of Human Capital
Management
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Outside Advisors
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Board Structure and Meetings
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Executive Sessions
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Succession Planning
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Attendance of Board Members at Annual
Meetings
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THE BOARD AND ITS COMMITTEES
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Audit Committee
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Compensation and Leadership Development
Committee
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Nominating and Governance Committee
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14 |
DIRECTOR NOMINATIONS AND COMMUNICATION WITH
DIRECTORS
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Criteria for Nomination to the Board
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Process for Identifying and Evaluating
Nominees
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Stockholder Proposals for Nominees
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Contacting the Board of Directors
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PROPOSAL NO. 1 ELECTION OF DIRECTORS
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Nominees for Director
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Summary of Director Qualifications and
Experience
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Director Compensation
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Fiscal 2019 Director Compensation
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PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Principal Accountant Fees and Services
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Policy on Audit Committee Pre-Approval of Audit and
Permissible Non-Audit Services of Independent Registered Public
Accounting Firm
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PROPOSAL NO. 3 ADVISORY VOTE TO APPROVE EXECUTIVE
COMPENSATION
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PROPOSAL NO. 4 STOCKHOLDER PROPOSAL REGARDING
INDEPENDENT BOARD CHAIRMAN
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31 |
OUR EXECUTIVE OFFICERS
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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Delinquent Section 16(a) Reports
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EXECUTIVE COMPENSATION AND RELATED
INFORMATION
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COMPENSATION DISCUSSION & ANALYSIS
(CD&A)
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Summary Compensation Table for Fiscal
2019
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Grants of Plan-Based Awards in Fiscal
2019
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Outstanding Equity Awards at Fiscal Year-End
2019
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Option Exercises and Stock Vested in Fiscal
2019
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Non-Qualified Deferred Compensation in Fiscal
2019
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Potential Payments Upon Termination or
Change-In-Control
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CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
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Related-Person Transactions Policy and
Procedure
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Certain Related Person Transactions
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REPORT OF THE AUDIT COMMITTEE
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Information About Solicitation and Voting
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About the Annual Meeting
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ADDITIONAL INFORMATION
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Stockholder Proposals for the 2020 Annual
Meeting
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Available Information
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77 |
"Householding" — Stockholders Sharing the Same
Last Name and Address
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OTHER MATTERS
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77 |
ii
Table of
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PROXY SUMMARY
This summary
highlights information contained elsewhere in this proxy statement.
This summary does not contain all of the information that you
should consider, and you should read the entire proxy statement
carefully before voting.
2019
ANNUAL MEETING OF STOCKHOLDERS INFORMATION
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Date and
Time: |
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Thursday, December 19, 2019 at 9:00 a.m. Pacific
Time |
Location: |
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Meeting live via the Internet by visiting
www.virtualshareholdermeeting.com/NLOK2019 |
Record Date: |
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November 1, 2019 |
Admission: |
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To participate in the Annual Meeting, visit
www.virtualshareholdermeeting.com/NLOK2019. You will need the
16-digit control number included on your Notice of Internet
Availability of Proxy Materials, on your proxy card or on the
instructions that accompanied your proxy materials. |
VOTING
MATTERS
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Proposals
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Board
Recommendation |
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Page Number for
Additional
Information |
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1. Election of Directors |
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2. Ratification of Independent
Registered Public Accounting Firm |
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FOR |
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3. Advisory Vote to Approve Executive
Compensation |
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FOR |
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4. Stockholder Proposal regarding
Independent Chairman |
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AGAINST |
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OUR
DIRECTOR NOMINEES
AC = Audit
Committee CC =
Compensation and Leadership Development
Committee NGC =
Nominating & Corporate Governance Committee
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Member |
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Chair |
* Reflects our Board and committee
composition following the Annual Meeting, assuming Ms. Denzel
and Mr. Pilette are elected. Neither Ms. Denzel nor
Mr. Pilette currently serve on the Board of Directors or on
any committees of the Board. Also gives effect to the appointment
of Mr. Pilette as our CEO as of November 8,
2019.
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OVERVIEW OF DIRECTOR NOMINEE QUALIFICATIONS AND
EXPERIENCE


SOUND
CORPORATE GOVERNANCE PRACTICES
- ✓
- Separate Independent Chairman and CEO
- ✓
- Board Committees Consist Entirely of Independent
Directors
- ✓
- All
Current Directors Attended at least 75% of Meetings Held
- ✓
- Independent Directors Meet Regularly in Executive
Session
- ✓
- Annual Board and Committee Self-Evaluations
- ✓
- Risk Oversight by Full Board and Committees
- ✓
- Annual Election of All Directors
- ✓
- Majority Voting for Directors
- ✓
- Stockholder Ability to Call Special Meetings (15%
threshold)
- ✓
- Stockholder Ability to Act by Written Consent
- ✓
- Proxy Access Subject to Standard Eligibility
Requirements
- ✓
- Insider Trading Policy Prohibits Short-selling, Hedging and
Pledging NortonLifeLock Securities
- ✓
- Stock Ownership Requirements for Directors and Executive
Officers
EXECUTIVE
COMPENSATION PHILOSOPHY AND PRACTICES
The overriding
principle driving our compensation programs continues to be our
belief that it benefits our employees, customers, partners and
stockholders to have management's compensation tied to our near-and
long-term performance. Our pay programs reward achievement of
challenging performance goals that align with our business
strategy.
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Drive Business Success |
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Pay for Performance |
Our executive compensation program is designed to drive our success
as a market leader in cybersecurity. |
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We believe that executive compensation should be tied to our short
and long-term performance. It is important to reward outstanding
individual performance, team success, and Company-wide
results. |
Attract and Retain |
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Balancing and Aligning Interests with Stockholders |
We focus on corporate and individual performance objectives and aim
to attract and retain highly-qualified executive officers while
maximizing long-term stockholder value. |
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We are sensitive to our need to balance and align the interests of
our executive officers with those of our stockholders, especially
when compensation decisions might increase our cost structure or
stockholder dilution. |
Consistent with
our pay-for-performance philosophy, our executive officers'
compensation is structured so that a large portion of their total
direct compensation is paid based on Company performance (modified
by individual achievement). The total mix of our NEO compensation,
including the portion at risk, is reflected in the graphs below.
The major components of target compensation for our NEOs during
fiscal 2019 ("FY19") were: (i) base salary, (ii) target
annual incentive awards and (iii) grant date fair value of
long-term equity incentive awards, with the exception of our CEO
who did not receive any equity awards for FY19 (please see
"Executive Compensation and Related Information — Compensation
Discussion & Analysis (CD&A)" beginning on page 37 for
more discussion of executive officer pay mix).

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The following
factors demonstrate our continued and heightened commitment to
pay-for-performance and to corporate governance best
practices:
SOUND
COMPENSATION POLICIES AND PRACTICES
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EFFECTIVELY
ALIGNING PAY FOR PERFORMANCE
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Component |
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Metric(1) |
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Achievement (as a
percent of target) |
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Funding |
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FY19 Executive
Annual |
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FY19 Non-GAAP operating
income |
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87.5% |
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0% |
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Incentive Plan
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FY19 Non-GAAP revenue |
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97.2% |
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71.2% |
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FY19 EAIP Total |
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35.6% |
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FY19 Executive
Compensation |
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FY19
Performance-based |
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FY19 earnings per share
("EPS") |
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88.3% |
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50.6% |
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Restricted Stock
Units |
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FY19 free cash flow |
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90.7% |
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91.2% |
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FY18 Performance-based
Restricted Stock Units |
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2-year total shareholder return
("TSR") relative to Nasdaq 100 |
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-21.32% |
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0% |
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Fiscal 2017 ('FY17')
Performance-based Restricted Stock Units |
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FY18 Non-GAAP Operating
Income |
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109.29% |
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268.2% (of which 250% vested and settled
at the end of FY18, and the remaining 18.2% vested for eligible
participants at the end of FY19). |
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(1) Please
see discussion below in Compensation Discussion and Analysis for
more detail regarding how these metrics are calculated.
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MEETING
INFORMATION
We provide
information about NortonLifeLock's 2019 Annual Meeting of
Stockholders (the "Annual Meeting"), voting and additional
information starting on page 73.
5
Table of
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CORPORATE GOVERNANCE
NortonLifeLock
is strongly committed to good corporate governance practices. These
practices provide an important framework within which our Board of
Directors (the "Board") and management can pursue our strategic
objectives for the benefit of our stockholders.
Corporate Governance Guidelines
Our Corporate
Governance Guidelines generally specify the distribution of rights
and responsibilities of NortonLifeLock's Board, management and
stockholders, and detail the rules and procedures for making
decisions on corporate affairs. In general, the stockholders elect
the Board and vote on certain extraordinary matters; the Board is
responsible for the general governance of our Company, including
selection and oversight of key management; and management is
responsible for running our day-to-day operations.
Our Corporate
Governance Guidelines are available on the Investor Relations
section of our website, which is located at investor.NortonLifeLock.com, by
clicking on "Company Charters," under "Corporate Governance." The
Corporate Governance Guidelines are reviewed at least annually by
our Nominating and Governance Committee, and changes are
recommended to our Board for approval as appropriate. Our Board
represents the interests of the stockholders in perpetuating a
successful business and optimizing long term stockholder value. The
Board is responsible for ensuring that the Company is managed in a
manner that is designed to serve those interests.
Code of Conduct and Code of Ethics
We have adopted
a code of conduct that applies to all of our Board members,
officers and employees. We have also adopted a code of ethics for
our Chief Executive Officer and senior financial officers,
including our principal financial officer and principal accounting
officer. Our Code of Conduct
and Financial Code of
Ethics are posted on the Investor
Relations section of our website located at investor.NortonLifeLock.com, by
clicking on "Company Charters," under "Corporate Governance." Any
amendments or waivers of our Code of
Conduct and Code
of Ethics for Chief Executive Officer and Senior Financial
Officers pertaining to a member of our
Board or one of our executive officers will be disclosed on our
website at the above-referenced address.
Insider Trading, Hedging and Pledging Policies
Our Insider
Trading Policy prohibits all directors and employees from
short-selling NortonLifeLock stock or engaging in transactions
involving NortonLifeLock-based derivative securities, including,
but not limited to, trading in NortonLifeLock-based option
contracts (for example, buying and/or writing puts and calls). It
also prohibits pledging NortonLifeLock stock as collateral for a
loan. In connection with our settlement with Starboard
Value LP in September 2018, we agreed to waive these
requirements with respect to certain forward contracts held by
Starboard and have since granted Starboard waivers for other
forward contracts on a limited basis.
In addition,
our Insider Trading Policy prohibits our directors, officers,
employees and contractors from purchasing or selling NortonLifeLock
securities while in possession of material, non-public information.
It also requires that each of our directors, our Chief Executive
Officer, our President, and our Chief Financial Officer conduct any
open market sales of our securities only through the use of stock
trading plans adopted pursuant to Rule 10b5-1 of the Exchange
Act. Rule 10b5-1 allows insiders to sell and diversify their
holdings in our stock over a designated period by adopting
pre-arranged stock trading plans at a time when they are not aware
of material nonpublic information about us, and thereafter sell
shares of our common stock in accordance with the terms of their
stock trading plans without regard to whether or not they are in
possession of material nonpublic information about the Company at
the time of the sale. All other executives are strongly encouraged
to trade using Exchange Act Rule 10b5-1 plans.
Stock Ownership Guidelines
Our Board
adopted stock ownership guidelines to better align our directors'
and officers' interests with those of our stockholders. Details of
our directors' stock ownership guidelines are disclosed under
"Summary of Director Qualifications and Experience" on page 26, and
details of our executive officers' stock ownership guidelines are
disclosed under "Stock Ownership Requirements" in the "Compensation
Discussion & Analysis" section on page 57. The
Compensation Committee determines the stock ownership guidelines
and the Nominating and Governance Committee monitors compliance
under such guidelines.
6
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Stockholder Engagement
We are
committed to ongoing engagement with our stockholders to gain
valuable insight into the issues that matter most to them and to
enable our Company to address them effectively. During fiscal 2019
we engaged in discussions with stockholders representing
approximately 55% of our outstanding shares to discuss among other
things, our strategy, and focus on delivering financial results
that create significant stockholder value, as well as corporate
governance and executive compensation. Our stockholders were
generally supportive of the direction of the Company and provided
valuable insights and feedback, which was shared with the full
Board for review and consideration.
Majority Vote Standard and Director Resignation
Policy
Our Bylaws and
Corporate Governance Guidelines provide for a majority voting
standard for the election of directors. Under the majority vote
standard, each nominee must be elected by a majority of the votes
cast with respect to such nominee at any meeting for the election
of directors at which a quorum is present. A "majority of the votes
cast" means the votes cast "for" a nominee's election must exceed
the votes cast "against" that nominee's election. A plurality
voting standard will apply instead of the majority voting standard
if: (i) a stockholder has provided us with notice of a nominee
for director in accordance with our Bylaws; and (ii) that
nomination has not been withdrawn as of 10 days before we
first deliver proxy materials to stockholders.
To effectuate
this policy with regard to incumbent directors, the Board will not
nominate an incumbent director for re-election unless prior to such
nomination the director has agreed to promptly tender a resignation
if such director fails to receive a sufficient number of votes for
re-election at the stockholder meeting with respect to which such
nomination is made. Such resignation will be effective upon the
earlier of (i) the Board's acceptance of such resignation or
(ii) the 90th day after certification of the election
results of the meeting; provided, however, that prior to the
effectiveness of such resignation, the Board may reject such
resignation and permit the director to withdraw such
resignation.
If an incumbent
director fails to receive the required vote for re-election, the
Nominating and Governance Committee shall act on an expedited basis
to determine whether to recommend acceptance or rejection of the
director's resignation and will submit such recommendation for
prompt consideration by the Board. The Board intends to act
promptly on the Committee's recommendation and will decide to
accept or reject such resignation and publicly disclose its
decision within 90 days from the date of certification of the
election results. The Nominating and Governance Committee and the
Board may consider such factors they deem relevant in deciding
whether to accept or reject a resignation tendered in accordance
with this policy. The Board expects a director whose resignation is
under consideration to abstain from participating in any decision
regarding the resignation.
Proxy Access
Our Bylaws
contain "proxy access" provisions which permit a stockholder, or a
group of up to 50 stockholders, owning continuously for at least
three years a number of shares of our common stock that constitutes
at least 3% of our outstanding shares of common stock, to nominate
and include in our proxy materials director nominees constituting
up to the greater of two individuals or 20% of the Board, provided
that the stockholder(s) and the nominee(s) satisfy the requirements
specified in the Bylaws. Our Bylaws specifically allow funds under
common management to be treated as a single stockholder, and permit
share lending with a five-day recall. They do not contain any
post-meeting holding requirements, do not have any limits on
resubmission of failed nominees, and do not contain restrictions on
third-party compensation.
Board Leadership Structure
Our Board does
not have a policy on whether the roles of Chief Executive Officer
and Chairman should be separate. Instead, it retains the
flexibility to determine on a case-by-case basis whether the Chief
Executive Officer, or an independent director, should serve as
Chairman. During those periods in which the positions of Chairman
and Chief Executive Officer are combined, the independent directors
appoint an independent director as a Lead Independent Director.
Currently, the roles of Chief Executive Officer and Chairman are
separate. Daniel Schulman, one of our independent directors not
standing for re-election at this meeting, was appointed as
non-executive Chairman of the Board in January 2013. Accordingly,
the Board expects to appoint one of our current independent
directors to serve as our non-executive Chairman of the Board,
effective as of the Annual Meeting.
The Board
believes that separating the roles of Chief Executive Officer and
Chairman is the appropriate leadership structure for our Company at
this time because it results in an effective balancing of
responsibilities, experience and perspectives that meets the
current corporate governance needs and oversight responsibilities
of the Board. The Board also believes that this structure allows
our Chief Executive Officer to focus on executing our Company's
strategic plan and
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managing our Company's operations and performance, while
allowing the Chairman of the Board to focus on the effectiveness of
the Board and independent oversight of our senior management
team.
The duties of
the Chairman of the Board and Chief Executive Officer are set forth
in the table below:
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Chairman of the
Board |
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CEO |
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Sets the agenda of
Board meetings |
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Sets strategic direction for the Company |
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Presides over meetings of the full Board |
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Creates and implements the Company's vision and mission |
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Contributes to Board governance and Board
processes |
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Leads the affairs of the Company, subject to the overall direction
and supervision of the Board and its committees and subject to such
powers as reserved by the Board and its committees |
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Communicates with all directors on key issues and
concerns outside of Board meetings |
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Presides over meetings of stockholders |
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Board Independence
It is the
policy of the Board and The Nasdaq Stock Market LLC's
("Nasdaq") rules require that listed companies have a board of
directors with at least a majority of independent directors, as
defined under Nasdaq's Marketplace Rules. Currently, each member of
our Board, other than any person serving on our Board who also
serves as our CEO, is an independent director, and all standing
committees of the Board are composed entirely of independent
directors. The Nasdaq independence definition includes a series of
objective tests, such as that the director is not an employee of
the company and has not engaged in various types of business
dealings with the company. In addition, the Board has made a
subjective determination as to each independent director that no
relationship exists which, in the opinion of the Board, would
interfere with the exercise of independent judgment in carrying out
the responsibilities of a director. In making these determinations,
the directors reviewed and discussed information provided by the
directors and our Company with regard to each director's business
and other activities as they may relate to NortonLifeLock and our
management. Based on this review and consistent with our
independence criteria, the Board has affirmatively determined that
the following current directors and director nominees are
independent: Sue Barsamian, Frank E. Dangeard, Nora M. Denzel,
Peter A. Feld, Dale L. Fuller, Kenneth Y. Hao, David W. Humphrey,
David L. Mahoney, Anita M. Sands, Daniel H. Schulman, V. Paul Unruh
and Suzanne M. Vautrinot.
Change in Director Occupation
Our Corporate
Governance Guidelines include a policy that our Board should
consider whether a change in any director's professional
responsibilities directly or indirectly impacts that person's
ability to fulfill his or her directorship obligations. To
facilitate the Board's consideration, all directors shall submit a
resignation as a matter of course upon retirement, a change in
employer, or other significant change in their professional roles
and responsibilities. Such resignation may be accepted or rejected
in the discretion of the Board.
Board and Committee Effectiveness
It is important
to NortonLifeLock that our Board and its committees are performing
effectively and in the best interests of our Company and its
stockholders. The Nominating and Governance Committee reviews the
size, composition and needs of the Board with established criteria
to ensure the Board has the appropriate skills and expertise to
effectively carry out its duties and responsibilities. In addition,
an evaluation of the Board's and its committees' operations and
performance is conducted annually by the Nominating and Governance
Committee. Changes are recommended by the Nominating and Governance
Committee for approval by the full Board as appropriate.
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Board's Role in Risk Oversight
The Board
executes its risk management responsibility directly and through
its committees.

The Board is
kept abreast of its committees' risk oversight and other activities
via reports of the committee chairmen to the full Board during the
Board meetings. In addition, the Board participates in regular
discussions with our senior management on many core subjects,
including strategy, operations and finance, in which risk oversight
is an inherent element. The Board believes that its leadership
structure, as described above under "Board Leadership Structure,"
facilitates the Board's oversight of risk management because it
allows the Board, with leadership from the independent,
non-executive Chairman and each independent committee chair, to
participate actively in the oversight of management's
actions.
Board's Role in Oversight of Company Strategy
One of the
Board's most important responsibilities is collaborating with
management to establish the Company's long-term strategy and then
overseeing and providing guidance to management in the execution of
the articulated strategy. Various elements of our strategy are
discussed in depth at every quarterly Board meeting, with
management providing the Board with an update on performance with
an update on execution against short and longer-term elements of
strategy. The Board also meets annually for a multi-day session
where long-term strategy is the primary topic. While the full
Board, with leadership of the Chairman, has responsibility for
overseeing overall Company strategy, each of our key Committees
provides input to the full Board on strategic and
execution-oriented issues related to their respective areas of
focus. The Board receives regular updates from the management team
(including those below the executive level) regarding the Company's
strategy and performance to inform its perspective on progress and
ensure that it is able to effectively perform its oversight
responsibilities.
Board's Role in Oversight of Human Capital
Management
The Board has
long recognized that our employees are one of our most important
assets and is engaged with management on ensuring that our Company
is an employer of choice for the most talented employees in our
industry. While the full Board discusses human capital management
with regards to its role in overseeing our overall long-term
strategy, our
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Compensation Committee has responsibility for overseeing human
capital management. The Compensation Committee, together with our
Nominating and Governance Committee, are tasked with overseeing
specific initiatives on a regular basis.
Our
Compensation Committee is responsible for, among other
tasks:
- •
- Monitoring employee turnover on a quarterly basis; and
- •
- Overseeing compensation philosophies and incentive plans across
our workforce.
Our Nominating
and Governance Committee has regular touchpoints with management on
the following topics:
- •
- Employee engagement and work-life integration
initiatives;
- •
- Monitoring our workforce planning, including required
capabilities and skills development;
- •
- Understanding our workforce demographics and diversity, equity
and inclusion strategies; and
- •
- Monitoring our corporate culture.
Outside Advisors
The Board and
its committees are free to engage independent outside financial,
legal and other advisors as they deem necessary to provide advice
and counsel on various topics or issues, at NortonLifeLock's
expense, and are provided full access to our officers and
employees.
Board Structure and Meetings
The Board and
its committees meet throughout the year on a set schedule, and also
hold special meetings and act by written consent from time to time.
The Board held a total of 24 meetings during fiscal 2019. During
this time, no directors attended fewer than 75% of the aggregate of
the total number of meetings held by the Board and the total number
of meetings held by all committees of the Board on which such
director served (during the period which such director
served).
Agendas and
topics for board and committee meetings are developed through
discussions between management and members of the Board and its
committees. Information and data that are important to the issues
to be considered are distributed in advance of each meeting. Board
meetings and background materials focus on key strategic,
operational, financial, governance and compliance matters
applicable to us, including the following:
- •
- Reviewing annual and longer-term strategic and business
plans;
- •
- Reviewing key product, industry and competitive issues;
- •
- Reviewing and determining the independence of our
directors;
- •
- Reviewing and determining the qualifications of directors to
serve as members of committees, including the financial expertise
of members of the Audit Committee;
- •
- Selecting and approving director nominees;
- •
- Selecting, evaluating and compensating the Chief Executive
Officer;
- •
- Reviewing and discussing succession planning for the senior
management team, and for lower management levels to the extent
appropriate;
- •
- Reviewing and approving material investments or divestitures,
strategic transactions and other significant transactions that are
not in the ordinary course of business;
- •
- Evaluating the performance of the Board;
- •
- Overseeing our compliance with legal requirements and ethical
standards; and
- •
- Overseeing our financial results.
Executive Sessions
After each
regularly scheduled Board meeting, the independent members of our
Board hold a separate closed meeting, referred to as an "executive
session." These executive sessions are used to discuss such topics
as the independent directors deem necessary or appropriate. At
least annually, the independent directors hold an executive session
to evaluate the Chief Executive Officer's performance and
compensation. Executive sessions of the Board are led by the
independent, non-executive Chairman.
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Succession Planning
Our Board
recognizes the importance of effective executive leadership to
NortonLifeLock's success, and meets to discuss executive succession
planning at least annually. Our Board develops and reviews
emergency and long-term succession plans and evaluates succession
candidates for the CEO and other senior leadership positions under
both. The Board also oversees management's senior executive talent
development plans, including ensuring that our succession
candidates have regular interactions with the Board.
Attendance of Board Members at Annual Meetings
We encourage
our directors to attend our annual meetings of stockholders. All
directors who were elected to the Board at our 2018 Annual Meeting
attended that meeting.
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THE BOARD AND ITS COMMITTEES
There are three
primary committees of the Board: the Audit Committee, Compensation
and Leadership Development Committee and Nominating and Governance
Committee. The Board has delegated various responsibilities and
authorities to these different committees, as described below and
in the committee charters. The Board committees regularly report on
their activities and actions to the full Board. Each member of the
Audit Committee, Compensation Committee and Nominating and
Governance Committee was appointed by the Board. Each of the Board
committees has a written charter approved by the Board and
available on our website at investor.NortonLifeLock.com, by
clicking on "Company Charters," under "Corporate
Governance."
The following
table shows the proposed composition of the Board of Directors and
its committees, and other information, following the Annual
Meeting. Current committee composition is provided in the text
below the table.
AC = Audit
Committee CC =
Compensation and Leadership Development
Committee NGC =
Nominating & Corporate Governance Committee
= Member
= Chair
- *
- Reflects our Board and committee
composition following the Annual Meeting. Neither Ms. Denzel
nor Mr. Pilette is currently serving on the Board of Directors
or on any committees of the Board. Also gives effect to the
appointment of Mr. Pilette as our CEO as of November 8,
2019.
During fiscal
2019, our Board of Directors held 24 meetings, the Audit Committee
held 32 meetings, the Compensation Committee held 15 meetings and
the Nominating Committee held 4 meetings.
Audit Committee
Our Audit
Committee is currently comprised of Mr. Unruh, who is the
chair of the Audit Committee, Mmes. Sands and Vautrinot, and
Messrs. Dangeard and Fuller. Our Audit Committee oversees our
Company's accounting and financial reporting processes and the
audits of our financial statements, including oversight of our
systems of internal control over financial reporting and disclosure
controls and procedures, compliance with legal and regulatory
requirements, internal audit function and the appointment,
retention and compensation of our independent auditors. Its duties
and responsibilities include, among other things:
- •
- Reviewing and discussing with management our Company's
quarterly and annual financial statements.
- •
- Reviewing the adequacy and effectiveness of our Company's
accounting and financial reporting processes.
- •
- Appointing and, if necessary, terminating any registered public
accounting firm engaged to render an audit report or to perform
other audit, review or attest services for our Company.
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- •
- Reviewing and approving processes and procedures to ensure the
continuing independence of our Company's independent
auditors.
- •
- Reviewing the internal audit function of our Company, including
the independence and authority of its reporting obligations and the
coordination of our Company's internal audit function with the
independent auditors.
- •
- Reviewing our Company's practices with respect to risk
assessment and risk management and meet with management and members
of internal audit to discuss our Company's significant risk
exposures and the steps management has taken to monitor, control
and mitigate such exposures.
- •
- Reviewing our Company's ethics compliance program, including
policies and procedures for monitoring compliance, and the
implementation and effectiveness of our Company's ethics and
compliance program.
- •
- Directing and supervising investigations into any matters
within the scope of its duties, and authority and funding to retain
such outside counsel, experts and other advisors as it determines
to be necessary to carry out its responsibilities.
Our Board has
unanimously determined that all Audit Committee members are
independent as defined by current Nasdaq listing standards for
Audit Committee membership and financially literate under current
Nasdaq listing standards, and at least one member has financial
sophistication as required pursuant to the Nasdaq listing
standards. In addition, our Board has unanimously determined that
Mr. Unruh qualifies as an "audit committee financial expert"
under the SEC rules and regulations. Designation as an "audit
committee financial expert" is an SEC disclosure requirement and
does not impose any additional duties, obligations or liability on
any person so designated.
Compensation and Leadership Development
Committee
Our
Compensation Committee is currently comprised of Mr. Feld, who
is the chair of the Compensation Committee, and Ms. Barsamian
and Messrs. Dangeard and Mahoney. Our Compensation Committee
oversees our compensation policies and practices so that they align
with the interests of our stockholders; encourage a focus on our
Company's long-term success and performance; and incorporate sound
corporate governance principles. It also oversees our programs to
attract, retain and develop our executive officers. Its duties and
responsibilities include, among other things:
- •
- Reviewing executive and leadership development practices that
support our Company's ability to retain and develop the executive
and leadership talent required to deliver against our Company's
short term and long term business strategies, including succession
planning for the executive officers.
- •
- Reviewing our Company's compensation policies, plans and
programs to confirm they: (i) are designed to attract,
motivate and retain talented executive officers;
(ii) compensate the executive officers effectively in a manner
consistent with the strategy of our Company and the interests of
stockholders; (iii) are consistent with a competitive
framework; and (iv) support the achievement of our Company's
overall financial results and individual contributions.
- •
- Reviewing and recommending to the independent directors of our
Board all compensation arrangements for our Chief Executive
Officer.
- •
- Determining stock ownership guidelines for our Board and
executive officers.
- •
- Reviewing our Company's overall compensation and benefits
programs.
- •
- Administering our equity incentive and stock purchase
plans.
- •
- Reviewing and recommending to the Board compensation for
non-employee members of the Board.
- •
- Reviewing and approving policies and procedures relating to
perquisites of our executive officers.
- •
- Reviewing our Company's compensation policies and practices to
confirm that such policies and practices are not likely to have a
material /adverse effect on our Company and do not encourage
excessive or inappropriate risk-taking by our executives.
- •
- Reviewing and making recommendations regarding Company policies
on recoupment of incentive-based compensation.
- •
- Reviewing and making recommendations to the Board with respect
to stockholder proposals and stockholder advisory votes related to
executive compensation matters.
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Each member of
the Compensation Committee is a non-employee director, as defined
pursuant to Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and an
outside director, as defined under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code").
Nominating and Governance Committee
Our Nominating
and Governance Committee is currently comprised of
Mr. Mahoney, who is the chair of the Nominating and Governance
Committee, and Messrs. Dangeard, Feld, Fuller and Schulman.
Our Nominating and Governance Committee oversees our Company's
corporate governance procedures and policies, and ensures that they
represent best practices and are in the best interests of our
Company and its stockholders, which includes establishing
appropriate criteria for nominating qualified candidates to the
Board. Its duties and responsibilities include, among other
things:
- •
- Establishing the criteria and determining the desired
qualifications, expertise and characteristics of the Board, with
the goal of developing a diversity of perspectives, backgrounds,
experiences, knowledge and skills on the Board.
- •
- Considering the size, composition and needs of the Board and
evaluate and recommending qualified candidates for election to the
Board consistent with the established criteria to ensure the Board
has the appropriate skills and expertise.
- •
- Advising the Board on corporate governance matters and
recommend to the Board appropriate or necessary actions to be taken
by our Company, the Board and the Board's committees.
- •
- Identifying best corporate governance practices and develop and
recommend to the Board a set of corporate governance guidelines
applicable to our Company.
- •
- Reviewing and assessing the adequacy of our Company's corporate
governance policies, including our Company's Corporate Governance
Guidelines and Code of Conduct, and recommend modifications to the
Board as appropriate.
- •
- Overseeing and reviewing our Company's policies and programs
concerning: (i) corporate social responsibility;
(ii) public policy; (iii) philanthropy;
(iv) political activities and expenditures; (v) our
Company's participation and visibility as a global corporate
citizen; and (vi) our Company's sustainability performance,
including impacts to our business of environmental, social and
governance issues.
- •
- Monitoring compliance under the stock ownership guidelines as
set by the Compensation Committee for the Board and executive
officers.
- •
- Implementing and overseeing the processes for evaluating the
Board, its committees and the CEO on an annual basis.
- •
- Overseeing the management of risks that may arise in connection
with our Company's governance structures and processes.
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DIRECTOR NOMINATIONS AND COMMUNICATION WITH
DIRECTORS
Criteria for Nomination to the Board
The Nominating
and Governance Committee will consider candidates submitted by
NortonLifeLock stockholders, as well as candidates recommended by
directors and management, for nomination to the Board. The
Nominating and Governance Committee has generally identified
nominees based upon recommendations by outside directors,
management and executive recruiting firms. The goal of the
Nominating and Governance Committee is to assemble a Board that
offers a diverse portfolio of perspectives, backgrounds,
experiences, knowledge and skills derived from high-quality
business and professional experience. The Nominating and Governance
Committee annually reviews the appropriate skills and
characteristics required of directors in the context of the current
composition of the Board, our operating requirements and the
long-term interests of our stockholders.
The key
attributes, experience and skills we consider important for our
directors in light of our current business and structure
are:
- •
- Industry and Technology Expertise. As a security and technology company, understanding
new technologies and emerging industry trends or having experience
in security and related technologies is useful in understanding our
business and the market segments in which we compete, our research
and development efforts, competing technologies, the various
products and processes that we develop, and evolving customer
requirements.
- •
- Global Expertise. We
are a global organization with employees, offices, customers and
partners in many countries. Directors with global operating
expertise and an understanding of global economic and regulatory
frameworks, can provide a useful business and cultural perspective
regarding many significant aspects of our business.
- •
- Leadership Experience. Directors who have served in a senior leadership
position, as a general manager of a business, or as the functional
leader of a global sales, marketing or product development
organization, are important to us, because they bring experience
and perspective in analyzing, shaping, and overseeing the execution
of important strategic, operational and policy issues at a senior
level.
- •
- Public Company Board Experience. Directors who have served on other public company
boards can offer advice and insights with regard to the dynamics
and operation of a board of directors, the relations of a board to
the company's chief executive officer and other senior management
personnel, the importance of public-company corporate governance,
including oversight matters, strategic decisions and operational
and compliance-related matters.
- •
- Business Combinations and Partnerships
Experience. Directors who have
a background in mergers and acquisitions and strategic partnership
transactions can provide insight into developing and implementing
strategies for growing our business through combining and/or
partnering with other organizations and helping to evaluate
operational integration plans.
- •
- Financial Expertise. Knowledge of financial markets, financing
operations, complex financial management and accounting and
financial reporting processes is important because it assists our
directors in understanding, advising, and overseeing
NortonLifeLock's capital structure, financing and investing
activities, financial reporting, and internal control of such
activities.
- •
- Diversity. In addition
to a diverse portfolio of professional background, experiences,
knowledge and skills, the composition of the Board should reflect
the benefits of diversity as to gender, race, ethnic, cultural and
geographic backgrounds that reflect the composition of our global
investors, customers, employees and partners.
The information
provided under "Director Qualifications" below each of the brief
biographical descriptions set forth under Proposal No. 1,
"Election of Directors — Nominees for Director" below includes
the key individual attributes, experience and skills of each of our
directors that led to the conclusion that each director should
serve as a member of the Board of Directors at this
time.
Process for Identifying and Evaluating Nominees
The Nominating
and Governance Committee typically considers candidates by first
evaluating the current members of the Board who intend to continue
in service, balancing the value of continuity of service with that
of obtaining new perspectives, skills and experience. If the
Nominating and Governance Committee determines that an opening
exists, it identifies the desired skills and experience of a new
nominee, including the need to satisfy rules of the SEC and
Nasdaq.
The Nominating
and Governance Committee generally will evaluate each candidate
based on the extent to which the candidate contributes to the range
of talent, skill and expertise appropriate for the Board generally,
as well as the candidate's
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integrity, business acumen, diversity, availability,
independence of thought, and overall ability to represent the
interests of NortonLifeLock's stockholders. The Nominating and
Governance Committee does not assign specific weights to particular
criteria, and no particular criterion is necessarily applicable to
all prospective nominees. Although the Nominating and Governance
Committee uses these and other criteria as appropriate to evaluate
potential nominees, it has no stated minimum criteria for nominees.
In addition, we do not have a formal written policy with regard to
the consideration of diversity in identifying candidates; however,
as discussed above, diversity is one of the numerous criteria the
Nominating and Governance Committee reviews before recommending a
candidate. We have from time to time engaged, for a fee, a third-
party independent search firm to identify and assist the Nominating
and Governance Committee with identifying, evaluating and screening
Board candidates for NortonLifeLock and may do so in the
future.
Stockholder Proposals for Nominees
The Nominating
and Governance Committee will consider potential nominees properly
submitted by stockholders. Stockholders seeking to do so should
provide the information set forth in our corporate Bylaws regarding
director nominations. The Nominating and Governance Committee will
apply the same criteria for candidates proposed by stockholders as
it does for candidates proposed by management or other
directors.
To be
considered for nomination by the Nominating and Governance
Committee at next year's annual meeting of stockholders,
submissions by stockholders must be submitted by mail and must be
received by the Corporate Secretary no later than July 10,
2020 to ensure adequate time for meaningful consideration by the
Nominating and Governance Committee. Each submission must include
the following information:
- •
- the
full name and address of the candidate;
- •
- the
number of shares of NortonLifeLock common stock beneficially owned
by the candidate;
- •
- a
certification that the candidate consents to being named in the
proxy statement and intends to serve on the Board if elected;
and
- •
- biographical information, including work experience during the
past five years, other board positions, and educational background,
such as is provided with respect to nominees in this proxy
statement.
Information
regarding requirements that must be followed by a stockholder who
wishes to make a stockholder nomination for election to the Board
for next year's annual meeting is described in this proxy statement
under "Additional Information — Stockholder Proposals for the
2020 Annual Meeting."
Pursuant to the
proxy access provisions of our Bylaws, an eligible stockholder or
group of stockholders may nominate one or more director candidates
to be included in our proxy materials. The nomination notice and
other materials required by these provisions must be delivered or
mailed to and received by our Corporate Secretary in writing
between June 10, 2020 and July 10, 2020 (or, if the 2020
annual meeting is called for a date that is not within 30 calendar
days of the anniversary of the date of the 2019 Annual Meeting, by
the later of the close of business on the date that is
180 days prior to the date of the 2019 annual meeting or
within 10 calendar days after our public announcement of the date
of the 2020 annual meeting) to the Corporate Secretary at the
address listed below. When submitting nominees for inclusion in our
proxy materials pursuant to the proxy access provisions of our
Bylaws, stockholders must follow the notice procedures and provide
the information required therein.
Contacting the Board of Directors
Any stockholder
who wishes to contact members of our Board may do so by mailing
written communications to:
NortonLifeLock Inc.
60 E. Rio Salado Parkway, Suite 1000
Tempe, Arizona 85281
Attn: Corporate Secretary
The Corporate
Secretary will review all such correspondence and provide regular
summaries to the Board or to individual directors, as relevant,
will retain copies of such correspondence for at least six months,
and make copies of such correspondence available to the Board or
individual directors upon request. Any correspondence relating to
accounting, internal controls or auditing matters will be handled
in accordance with our policy regarding accounting complaints and
concerns.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the
recommendation of the Nominating and Governance Committee, the
Board has nominated the following eight persons to serve as
directors for the term beginning at the Annual Meeting on
December 19, 2019: Sue Barsamian, Frank E. Dangeard, Nora M.
Denzel, Peter A. Feld, Kenneth Y. Hao, David W. Humphrey, Vincent
Pilette and V. Paul Unruh. Each director will be elected on an
annual basis.
In September
2018, we entered into an agreement with Starboard Value LP and
certain of its affiliates, regarding, among other things, the
membership and composition of the Company's Board of Directors (the
"Board") and committees thereof. Pursuant to this agreement, among
other things, we appointed Sue Barsamian to the Board in January
2019.
Nora M. Denzel,
a director nominee, was recommended by the Nominating and
Governance Committee after an extensive and careful search was
conducted by a global search firm, and numerous candidates were
considered. Vincent Pilette, who has served as our CFO since May
2019 and as our CEO since November 2019, was recommended by the
Nominating and Governance Committee in connection with his
appointment as our new CEO.
In addition, on
November 4, 2019, the Company completed the sale of certain
assets of its enterprise security business to Broadcom Inc.
(the "Broadcom Sale"). In connection with this sale, the Board
determined that it was the proper time to reduce the size of the
Board, effective as of the Annual Meeting. Accordingly, Dale L.
Fuller, a member of our Board of Directors since 2018, Richard S.
Hill, a member of our Board since January 2019, David L. Mahoney, a
member of our Board of Directors since 2003, Anita M. Sands, a
member of our Board of Directors since 2013, Daniel H. Schulman, a
member of our Board of Directors since 2000 and Suzanne M.
Vautrinot, a member of our Board of Directors since 2013 are not
standing for re-election at the Annual Meeting. The Board thanks
Messrs. Fuller, Hill, Mahoney and Schulman and Mmes. Sands and
Vautrinot for their leadership and years of service to
NortonLifeLock.
Unless proxy
cards are otherwise marked, the persons named as proxies will vote
all proxies FOR the election of each nominee named in this section. Proxies
submitted to NortonLifeLock cannot be voted at the Annual Meeting
for nominees other than those nominees named in this proxy
statement. However, if any director nominee is unable or unwilling
to serve at the time of the Annual Meeting, the persons named as
proxies may vote for a substitute nominee designated by the Board.
Alternatively, the Board may reduce the size of the Board. Each
nominee has consented to serve as a director if elected, and the
Board does not believe that any nominee will be unwilling or unable
to serve if elected as a director. Each director will hold office
until the next annual meeting of stockholders and until his or her
successor has been duly elected and qualified or until his or her
earlier resignation or removal.
Nominees for Director
The names of
each nominee for director, their ages as of October 25, 2019,
after giving effect to the appointment of Mr. Pilette as our
CEO as of November 8, 2019, and other information about each
nominee is shown below.
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Name
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Age |
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Principal
Occupation
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Director
Since |
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Sue
Barsamian |
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60 |
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Director |
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2019 |
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Frank E.
Dangeard |
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61 |
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Managing Partner, Harcourt |
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2007 |
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Nora M.
Denzel |
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57 |
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Nominee |
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n/a |
* |
Peter A.
Feld |
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40 |
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Managing Member and Head of Research, Starboard
Value LP |
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2018 |
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Kenneth Y.
Hao |
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51 |
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Managing Partner and Managing Director, Silver Lake
Partners |
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2016 |
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David W.
Humphrey |
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42 |
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Managing Director, Bain Capital |
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2016 |
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Vincent
Pilette |
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47 |
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CEO |
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n/a |
* |
V. Paul
Unruh |
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71 |
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Director |
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2005 |
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Sue
Barsamian
Director
Age: 60
Director Since:
2019
Proposed Committee
Memberships:
• Compensation
• Nominating &
Governance
(Chair)
Other Current Public
Boards:
• Box, Inc.
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Ms. Barsamian
has served as a member of our Board since January
2019. Ms. Barsamian previously served as Executive Vice
President, Chief Sales and Marketing Officer of Micro Focus
International plc, an infrastructure software company, from
September 2017 through April 2018 and as Executive Vice President,
Chief Sales and Marketing Officer of HPE Software at Hewlett
Packard Enterprise from November 2016 until it was acquired by
Micro Focus in September 2017. From 2006 to November 2016,
Ms. Barsamian served in various executive roles at
Hewlett-Packard, including Senior Vice President and General
Manager of Enterprise Security Products and Senior Vice President
of Worldwide Indirect Sales. Prior to joining Hewlett-Packard,
Ms. Barsamian was Vice President, Global Go-to-Market at
Mercury Interactive Corporation and held leadership positions at
Critical Path, Inc. and Verity, Inc. Ms. Barsamian
serves on the board of directors of Box, Inc.
Ms. Barsamian served on the Board of the National Action
Council for Minorities in Engineering (NACME), and she served as
Chairman of the Board of NACME from 2016 to 2017. She received a
Bachelor of Science degree in electrical engineering from Kansas
State University and completed her post-graduate studies at the
Swiss Federal Institute of Technology.
Director
Qualifications:
•
Industry and Technology Experience — Executive Vice President, Chief Sales and Marketing
Officer of Micro Focus International plc and Executive Vice
President, Chief Sales and Marketing Officer, HPE
Software.
•
Global Experience — Executive
Vice President, Chief Sales and Marketing Officer of Micro Focus
International plc.
•
Leadership Experience —
Executive Vice President, Chief Sales and Marketing Officer of
Micro Focus International plc and Executive Vice President,
Chief Sales and Marketing Officer, HPE Software.
•
Public Company Board Experience — member of the board of directors of
Box, Inc.
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Table of
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Frank E.
Dangeard
Managing Partner,
Harcourt
Age: 61
Director Since:
2007
Proposed Committee
Memberships:
• Audit
• Compensation
• Nominating &
Governance
Other Current Public
Boards:
• RBS Group
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Mr. Dangeard
has served as a member of our Board since 2007. He
has been the Managing Partner of Harcourt, an advisory firm, since
2008. Mr. Dangeard was Chairman and Chief Executive Officer of
Thomson, a provider of digital video technologies, solutions and
services, from 2004 to 2008. From 2002 to 2004, he was Deputy Chief
Executive Officer of France Telecom, a global telecommunications
operator. From 1997 to 2002, Mr. Dangeard was Senior Executive
Vice President of Thomson and served as its Vice Chairman in 2000.
Prior to joining Thomson, he was Managing Director of SG
Warburg & Co. Ltd. from 1989 to 1997 in London,
Paris and Madrid and Chairman of SG Warburg France from 1995 to
1997. Prior to that, Mr. Dangeard was a lawyer with
Sullivan & Cromwell, in New York and London. He serves on
the board of directors of Arqiva PLC ("Arqiva"), The Royal
Bank of Scotland Group plc ("RBS Group") and as chairman of
the board of directors of Nat West Markets plc, the investment
bank of the RBS Group ("NatWest Markets"), and on a number of
advisory boards. Mr. Dangeard has previously served as a
director of a variety of companies, including Crédit Agricole CIB,
Eutelsat, Home Credit, SonaeCom, Thomson, Electricité de France and
Telenor. He graduated from the École des Hautes Études
Commerciales, the Paris Institut d'Études Politiques and holds an
LLM degree from Harvard Law School.
Director
Qualifications:
•
Industry and Technology Experience — former Chairman and Chief Executive Officer of Thomson;
former Deputy Chief Executive Officer of France Telecom; former
Deputy Chairman of Telenor; and former member of the boards of
directors of Eutelsat, SonaeCom and RPX Corporation.
•
Global Experience — member of
the board of directors of RBS Group (UK) and Arqiva (UK) and
chairman of NatWest Markets (UK); former Chairman and Chief
Executive Officer of Thomson (France); former Deputy Chief
Executive Officer of France Telecom (France); former Deputy
Chairman of Telenor (Norway); and former member of the boards of
directors of Crédit Agricole CIB (France), Eutelsat (France), Home
Credit (Czech Republic), Electricité de France (France) and
SonaeCom (Portugal).
•
Leadership Experience —
managing partner of Harcourt; former Chairman and Chief Executive
Officer of Thomson; former Deputy Chief Executive Officer of France
Telecom; former Deputy Chairman of Telenor and former Chairman of
SG Warburg France and Managing Director of SG
Warburg & Co. Ltd; and chairman of the board of
directors of NatWest Markets.
•
Public Company Board Experience — member of the board of directors of RBS Group; former
Deputy Chairman of Telenor; and former member of the boards of
directors of Eutelsat, Electricité de France, Thomson, and
SonaeCom.
•
Business Combinations and Partnerships
Experience — former Chairman and
Chief Executive Officer of Thomson; former Deputy Chief Executive
Officer of France Telecom; former Deputy Chairman of Telenor;
former Chairman of SG Warburg France; and former lawyer at
Sullivan & Cromwell LLP.
•
Financial Experience — former
Chairman and Chief Executive Officer of Thomson; former Deputy
Chief Executive Officer of France Telecom; former Chairman of the
Audit Committee of Electricité de France and former Deputy Chairman
of Telenor; member of the board of RBS Group; and Chairman of
NatWest Markets.
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Table of
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Nora M.
Denzel
Director
Age: 57
Director Since:
N/A*
Proposed Committee
Memberships:
• Audit
Other Current Public
Boards:
• Advanced Micro
Devices, Inc.
• Ericsson
• Talend S.A.
*Director nominee.
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Ms. Denzel,
a director nominee, previously served as interim Chief Executive
Officer of Outerwall Inc, an automated retail solutions provider,
from January to August 2015. Prior to Outerwall, Ms. Denzel
held various executive management positions from February 2008
through August 2012 at Intuit Inc., a cloud financial
management software company, including Senior Vice President of Big
Data, Social Design and Marketing and Senior Vice President and
General Manager of the QuickBooks Employee Management business
unit. From 2000 to 2006, Ms. Denzel held several executive
level positions at HP Enterprise (formerly Hewlett-Packard
Company), including Senior Vice President and General Manager,
Software Global Business Unit from May 2002 to February 2006 and
Vice President of Storage Organization from August 2000 to May
2002. Prior to that, Ms. Denzel held executive positions at
Legato Systems Inc. and IBM Corporation. Ms. Denzel
serves on the board of directors of Advanced Micro
Devices, Inc., Ericsson and Talend S.A. She holds a
Master of Business Administration degree from Santa Clara
University and a Bachelor of Science degree in Computer Science
from the State University of New York.
Director
Qualifications:
•
Industry and Technology Experience — Interim Chief Executive Officer of Outerwall Inc.,
executive positions at Intuit, Inc. and HP
Enterprise.
•
Global Experience — Interim
Chief Executive Officer of Outerwall Inc., executive positions
at Intuit, Inc. and HP Enterprise; member of the board of
directors of Advanced Micro Devices, Inc., Ericsson and
Talend S.A.
•
Leadership Experience —
Interim Chief Executive Officer of Outerwall Inc., executive
positions at Intuit, Inc. and HP Enterprise.
•
Public Company Board Experience — member of the board of directors of Advanced Micro
Devices, Inc., Ericsson and Talend S.A.
•
Business Combinations and Partnerships
Experience — Interim Chief Executive
Officer of Outerwall Inc., executive positions at
Intuit, Inc. and HP Enterprise; member of the board of
directors of Advanced Micro Devices, Inc., Ericsson and
Talend S.A.
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Table of
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Peter A.
Feld
Managing Member and Head of Research,
Starboard Value LP
Age: 40
Director Since:
2018
Proposed Committee
Memberships:
• Compensation
(Chair)
• Nominating &
Governance
Other Current Public
Boards:
• Magellan
Health, Inc.
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Mr. Feld
has served as a member of our Board since September
2018. Mr. Feld has served as a Managing Member and Head of
Research of Starboard Value LP since 2011. Mr. Feld has
served on the board of directors of Magellan Health, Inc.
since April 2019. Mr. Feld previously served on the boards of
directors of several companies, including Marvell Technology
Group Ltd. from May 2016 to June 2018, The Brink's Company
from January 2016 to November 2017, Insperity, Inc. from March
2015 to June 2017, Darden Restaurants, Inc. from October 2014
to September 2015, Xperi Corporation from 2013 to April 2014,
Integrated Device Technology, Inc. from 2012 to February 2014
and Unwired Planet, Inc. (n/k/a Great Elm Capital
Group, Inc.) from 2011 to March 2014 and as Chairman from 2011
to 2013. Mr. Feld received a Bachelor of Arts degree in
economics from Tufts University.
Director
Qualifications:
•
Industry and Technology Experience — current or former member of the boards of directors of
many public and private technology companies.
•
Global Expertise — Managing
Member and the Head of Research of Starboard Value LP; former
member of the boards of directors of Marvell Technology Group,
Insperity, Inc., and Darden Restaurants, Inc.
•
Leadership Experience —
Managing Member and the Head of Research of Starboard
Value LP.
•
Public Company Board Experience — member of the board of directors of Magellan
Health Inc.; and former member of the boards of directors of
Marvell Technology Group, Insperity, Inc., and Darden
Restaurants, Inc.
•
Business Combinations and Partnerships
Experience — Managing Member and the
Head of Research of Starboard Value LP.
•
Financial Experience — over
10 years of capital markets and corporate governance
experience.
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Table of
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Kenneth Y.
Hao
Managing Partner and Managing Director,
Silver Lake Partners
Age: 51
Director Since:
2016
Proposed Committee
Memberships:
• None
Other Current Public
Boards:
• Smart Global
Holdings, Inc.
• SolarWinds
Corporation
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Mr. Hao
has served as a member of our Board since 2016.
Mr. Hao joined Silver Lake Partners in 2000 and currently
serves Silver Lake as a Managing Partner and Managing Director.
Mr. Hao also serves on the boards of directors of SMART Global
Holdings, Inc. and SolarWinds Corporation, as well as on the
boards of directors of a number of private companies in Silver
Lake's portfolio. Prior to joining Silver Lake, he was an
investment banker with Hambrecht & Quist, where he served
as a Managing Director in the Technology Investment Banking group.
He also serves on the Executive Council for UCSF Health.
Mr. Hao graduated from Harvard University with a Bachelor's
degree in economics.
Director
Qualifications:
•
Industry and Technology Experience — over 25 years of technology investment experience;
member of the boards of directors of many public and private
technology companies.
•
Global Experience — extensive
experience investing in large global businesses and established
Silver Lake's Asia business.
•
Leadership Experience —
Managing Partner and Managing Director of Silver Lake and member of
the boards of directors of numerous major technology
companies.
•
Public Company Board Experience — members of the board of directors of SMART Global
Holdings, Inc. and SolarWinds Corporation; former board member
of Broadcom Inc. and Netscout Systems, Inc.
•
Business Combinations and Partnerships
Experience — Managing Partner and
Managing Director of Silver Lake Partners and former investment
banker with Hambrecht & Quist.
•
Financial Experience — over
25 years of investment experience in complex
transactions.
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David W.
Humphrey
Managing Director, Bain
Capital
Age: 42
Director Since:
2016
Proposed Committee
Memberships:
• None
Other Current Public
Boards:
• Genpact
Limited
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Mr. Humphrey
has served as a member of our Board since August
2016 when he joined in connection with Bain Capital's investment in
NortonLifeLock, prior to which he served on Blue Coat's board of
directors since May 2015. He is a Managing Director of Bain
Capital, a private equity firm, where he co-leads the firm's
investing efforts in technology, media and telecom investments and
where he has worked since 2001. Prior to joining Bain Capital,
Mr. Humphrey was an investment banker in the mergers and
acquisitions group at Lehman Brothers from 1999 to 2001. He serves
on the board of directors of Genpact Limited and on the board of
directors of a number of private companies in Bain Capital's
portfolio. Mr. Humphrey previously served on the boards of
directors of Bright Horizons Family Solutions, Inc.
Burlington Coat Factory Warehouse Corporation, Skillsoft PLC
and Bloomin' Brands, Inc. He received a Master of Business
Administration degree from Harvard Business School and a Bachelor's
degree from Harvard University.
Director
Qualifications:
•
Industry and Technology Experience — former member of the board of directors of Blue Coat;
Managing Director of Bain Capital; and member of the boards of
directors of BMC Software, Inc., Viewpoint Construction
Software, Waystar and Genpact Limited.
•
Global Experience — extensive
experience investing in large global businesses.
•
Leadership Experience —
Managing Director of Bain Capital and leader of its technology,
media and telecom vertical; and member of the boards of directors
of BMC Software, Inc., Viewpoint Construction Software,
Waystar and Genpact Limited.
•
Public Company Board Experience — member of the board of directors of BMC Software and
Genpact Limited. and former member of the boards of directors of
Bright Horizons Family Solutions, Inc. Burlington Coat Factory
Warehouse Corporation, Skillsoft PLC and Bloomin'
Brands, Inc.
•
Business Combinations and Partnerships
Experience — Managing Director of
Bain Capital and former investment banker with Lehman
Brothers.
•
Financial Experience —
Managing Director of Bain Capital and former investment banker with
Lehman Brothers.
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Table of
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Vincent
Pilette
Chief Executive Officer
Age: 47
Director Since:
N/A*
Proposed Committee
Memberships:
• None
Other Current Public
Boards:
• None
*Director nominee.
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Mr. Pilette
has been appointed to serve as our Chief Executive
Officer, effective November 8, 2019. From May 2019 to November
2019, he served as our Chief Financial Officer. Prior to joining
us, he served as Chief Financial Officer of Logitech
International S.A. from September 2013 to May 2019 and from
January 2011 through August 2013, he was Chief Financial Officer of
Electronics for Imaging, Inc. Prior to that, he served in a
variety of capacities at Hewlett-Packard Company from 1997 to
December 2010, including Vice President of Finance for the
Enterprise Server, Storage and Networking and vice president of
finance for the HP Software Group. Mr. Pilette received a
Master of Business Administration degree from Kellogg School of
Management at Northwestern University and Master's degree in
engineering and business from Université Catholique de
Louvain.
Director
Qualifications:
•
Industry and Technology Experience — former Chief Financial Officer of Logitech
International S.A.; former Chief Financial Officer of
Electronics for Imaging, Inc; served in a variety of capacities at
Hewlett-Packard Company, including Vice President of Finance for
the Enterprise Server.
•
Global Experience — former
Chief Financial Officer of Logitech International S.A.; former
Chief Financial Officer of Electronics for Imaging, Inc; served in
a variety of capacities at Hewlett-Packard Company, including Vice
President of Finance for the Enterprise Server.
•
Leadership Experience —
former Chief Financial Officer of Logitech International S.A.;
former Chief Financial Officer of Electronics for Imaging, Inc;
former Vice President of Finance for the Enterprise Server at
Hewlett-Packard Company.
•
Business Combinations and Partnerships
Experience — former Chief Financial
Officer of Logitech International S.A.; former Chief Financial
Officer of Electronics for Imaging, Inc; former Vice President of
Finance for the Enterprise Server at Hewlett-Packard
Company.
•
Financial Experience — former
Chief Financial Officer of Logitech International S.A.; former
Chief Financial Officer of Electronics for Imaging, Inc; former
Vice President of Finance for the Enterprise Server at
Hewlett-Packard Company.
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Table of
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V. Paul
Unruh
Director
Age: 71
Director Since:
2005
Proposed Committee
Memberships:
• Audit (chair)
Other Current Public
Boards:
• None
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Mr. Unruh
has served as a member of our Board since 2005
following the acquisition of Veritas, where he had served on the
board of directors since 2003. Mr. Unruh retired as Vice
Chairman of Bechtel Group, Inc., a global engineering and
construction services company, in 2003. During his 25-year tenure
at Bechtel Group, he held a number of management positions
including Treasurer, Controller and Chief Financial Officer.
Mr. Unruh also served as President of Bechtel Enterprises, the
finance, development and ownership arm from 1997 to 2001. He is a
member of the board of directors of Aconex Ltd., which is
traded on the Australian Stock Exchange, and a private company.
Mr. Unruh is a Certified Public Accountant.
Director
Qualifications:
•
Global Experience — former
Vice Chairman of and held various executive positions at Bechtel
Group, Inc.; former President of Bechtel Enterprises and
member of the board of directors of Aconex Ltd.
(Australia).
•
Leadership Experience —
former Vice Chairman of and held various executive positions at
Bechtel Group, Inc. and former President of Bechtel
Enterprises.
•
Public Company Board Experience — former member of the boards of directors of
Heidrick & Struggles International Inc.,
Move, Inc., URS Corporation and Aconex Ltd.
(Australia).
•
Business Combinations and Partnerships
Experience — former member of the
board of directors of Veritas Corporation, Move, Inc., and URS
Corporation.
•
Financial Experience — certified public accountant; former Chief Financial Officer,
Treasurer and Controller of Bechtel Group, Inc.; former
President of Bechtel Enterprises; served on the Audit Committees of
Heidrick & Struggles International, Inc. and
Move, Inc.
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25
Table of
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Summary of Director Qualifications and
Experience
Our Board is
comprised of directors with complementary skills and qualifications
needed to effectively oversee our business strategy. The Nominating
and Governance Committee annually reviews the skills and
characteristics required of members of the Board in the context of
the composition of the Board and the stage of the business of the
Company.
Director Compensation
The policy of
the Board is that compensation for independent directors should be
a mix of cash and equity-based compensation. NortonLifeLock does
not pay employee directors for Board service in addition to their
regular employee compensation. Independent directors may not
receive consulting, advisory or other compensatory fees from the
Company. The Compensation Committee, which consists solely of
independent directors, has the primary responsibility to review and
consider any revisions to director compensation.
Director
Stock Ownership Guidelines: The
Compensation Committee adopted the following stock ownership
guidelines for our non-employee directors to better align our
directors' interests with those of our stockholders:
- •
- Directors must maintain a minimum holding of Company stock with
a fair market value equal to ten times (10x) such director's total
annual cash retainer;
- •
- In
the event the annual retainer (or any portion thereof) is paid to a
non-employee director in equity instead of cash, the value of such
annual retainer for purposes of calculating the minimum holding
requirement means the grant date fair value of the annual equity
award (or applicable portion thereof);
- •
- New
directors will have three years to reach the minimum holding level;
and
- •
- Notwithstanding the foregoing, directors may sell enough shares
to cover their income tax liability on vested grants.
NortonLifeLock
stock ownership information for each of our directors is shown
under the heading "Security Ownership of Certain Beneficial Owners
and Management" on page 35 of this proxy statement. As of
October 25, 2019, our all our directors had either met their
stock ownership requirement or had remaining time to do
so.
Annual
Fees: In accordance with the
recommendation of the Compensation Committee, the Board determined
the non-employee directors' compensation for fiscal 2019 as
follows. In connection with its annual review of non-employee
director fees, the Compensation Committee reduced the annual fee
for Lead Independent Director/Independent Chairman from $100,000 in
fiscal 2019 to $75,000 effective fiscal 2020.
- •
- $50,000 annual cash retainer;
- •
- $15,000 annual fee for committee membership ($20,000 for Audit
Committee membership);
- •
- $25,000 annual fee for chairing a committee of the Board
($15,000 for chairing the Nominating and Governance Committee);
and
- •
- $100,000 (reduced to $75,000 effective fiscal 2020) annual fee
for the Lead Independent Director/Independent Chairman.
The payment of
the annual cash retainer is subject to the terms of the 2000
Director Equity Incentive Plan, as amended, which allows directors
to choose to receive common stock in lieu of cash for all or a
portion of the retainer payable to each director for serving as a
member. We pay the annual retainer fee and any additional annual
fees to each director at the beginning of the fiscal year.
Directors who join the Company after the beginning of the fiscal
year receive a prorated cash payment in respect of their annual
retainer fee and fees. These payments are considered earned when
paid. Accordingly, we do not require them to be repaid in the event
a director ceases serving in the capacity for which he or she was
compensated.
Annual
Equity Awards. Pursuant to a Non-Employee
Director Grant Policy adopted by our Board, each non-employee
member of the Board receives an annual award of fully-vested
restricted stock units ("RSUs") under the 2013 Plan, having a fair
market value on the grant date equal to a pre-determined dollar
value, which was $275,000 for fiscal 2019.
26
Table of
Contents
The following
table provides information for fiscal year 2019 compensation for
all of our current and former non-employee directors:
Fiscal 2019 Director
Compensation
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned
or Paid in
Cash
($)(1)(2) |
|
Stock
Awards
($)(3)(4) |
|
Total
($) |
|
Susan P. Barsamian(5)
|
|
|
3,383 |
|
|
73,210 |
(6) |
|
76,593 |
|
Frank E. Dangeard
|
|
|
85,018 |
|
|
274,982 |
|
|
360,000 |
|
Peter A. Feld(7)
|
|
|
16,071 |
|
|
174,108 |
(8) |
|
190,179 |
|
Dale L. Fuller(7)
|
|
|
34,821 |
|
|
147,321 |
|
|
182,142 |
|
Kenneth Y. Hao
|
|
|
21 |
|
|
324,979 |
(9) |
|
325,000 |
|
Richard S. Hill(5)
|
|
|
15,772 |
|
|
61,948 |
|
|
77,720 |
|
David W. Humphrey
|
|
|
21 |
|
|
324,979 |
(9) |
|
325,000 |
|
Geraldine B. Laybourne(10)
|
|
|
80,018 |
|
|
274,982 |
|
|
355,000 |
|
David L. Mahoney
|
|
|
105,024 |
|
|
274,976 |
|
|
380,000 |
|
Robert S.
Miller(10)(11)
|
|
|
120,639 |
|
|
124,635 |
|
|
245,274 |
|
Anita M. Sands
|
|
|
70,018 |
|
|
274,982 |
|
|
345,000 |
|
Daniel H. Schulman
|
|
|
195,018 |
|
|
274,982 |
|
|
470,000 |
|
V. Paul Unruh
|
|
|
95,018 |
|
|
274,982 |
|
|
370,000 |
|
Suzanne M. Vautrinot
|
|
|
70,018 |
|
|
274,982 |
|
|
345,000 |
|
- (1)
- Non-employee directors receive an
annual retainer fee of $50,000 plus an additional annual fee of
$15,000 (Compensation Committee and Nominating and Governance
Committee) or $20,000 (Audit Committee) for membership on each
committee. The chair of each committee receives an additional
annual fee of $15,000 (Nominating and Governance Committee) or
$25,000 (Audit Committee and Compensation Committee). The Lead
Independent Director/Independent Chairman receives an annual fee of
$100,000 (reduced to $75,000 for 2020).
- (2)
- Includes payments for fractional
share(s) from stock awards granted to each non-employee
director.
- (3)
- Amounts shown in this column
reflect the aggregate full grant date fair value calculated in
accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") Topic 718 for awards
granted during FY19.
- (4)
- Each non-employee director, other
than Ms. Barsamian and Messrs. Feld, Fuller, Hill and
Miller, was granted 12,320 RSUs on May 17, 2018, with a
per-share fair value of $22.32 and an aggregate grant date fair
value of $274,982.40. Each such director's fees were paid in cash
as reported in the "Fees Earned or Paid in Cash" column in the
table above. No non-employee director had any outstanding stock
awards as of March 29, 2019.
- (5)
- Ms. Barsamian and
Mr. Hill were appointed to our Board on January 7, 2019
and received a pro-rated portion of non-employee director fees from
the date of such director's appointment on January 7, 2019
through the end of FY19. Ms. Barsamian and Mr. Hill were
each granted 2,717 RSUs on February 5, 2019, with a per-share
fair value of $22.80 and an aggregate grant date fair value of
$61,947.60. The balance of each such director's fees was paid in
cash as reported in the "Fees Earned or Paid in Cash" column in the
table above.
- (6)
- In lieu of cash,
Ms. Barsamian elected to receive 100% of the pro-rated portion
of her annual retainer fee of $50,000 in the form of our common
stock. Accordingly, pursuant to the terms of the 2000 Director
Equity Incentive Plan, Ms. Barsamian was granted 494 shares at
a per share fair value of $22.80 and an aggregate grant date fair
value of $11,263. The balance of Ms. Barsamian's fee was paid
in cash as reported in the "Fees Earned or Paid in Cash" column in
the table above.
- (7)
- Messrs. Feld and Fuller were
appointed to our Board on September 16, 2018 and each received
pro-rated portions of such director's non-employee director fees
from the date of his appointment on September 16, 2018 through
the end of FY19. Messrs. Feld and Fuller were granted 6,764
RSUs on December 7, 2018, with a per-share fair value of
$21.78 and an aggregate grant date fair value of $147,320. The
balance of each such director's fees was paid in cash as reported
in the "Fees Earned or Paid in Cash" column in the table above.
- (8)
- In lieu of cash, Mr. Feld
elected to receive 100% of the pro-rated portion of his annual
retainer fee of $50,000 in the form of our common stock.
Accordingly, pursuant to the terms of the 2000 Director Equity
Incentive Plan, Mr. Feld was granted 1,229 shares at a per
share fair value of $21.78 and an aggregate grant date fair value
of $26,767. The balance of Mr. Feld's fee was paid in cash as
reported in the "Fees Earned or Paid in Cash" column in the table
above.
- (9)
- In lieu of cash, Messrs. Hao
and Humphrey each received 100% of his respective annual retainer
fee of $50,000 in the form of our common stock. Accordingly,
pursuant to the terms of the 2000 Director Equity Incentive Plan,
each was granted 2,240 shares at a per share fair value of $22.32
and an aggregate grant date fair value of $49,997. The balance of
each such director's fee was paid in cash as reported in the "Fees
Earned or Paid in Cash" column in the table above.
- (10)
- Ms. Laybourne and
Mr. Miller served on the Board through December 3, 2018,
the date of the Company's 2019 Annual Meeting of Stockholders.
- (11)
- Mr. Miller's non-employee
director fees were prorated through December 3, 2018, the date
of the Company's 2019 Annual Meeting of Stockholders.
Mr. Miller was granted 5,584 RSUs on May 17, 2018, with a
per-share fair value of $22.32 and an aggregate grant date fair
value of $124,635. The balance in director's fees was paid in cash
as reported in the "Fees Earned or Paid in Cash" column in the
table above.
THE
BOARD RECOMMENDS A VOTE "FOR" ELECTION OF
EACH OF THE EIGHT NOMINATED DIRECTORS.
27
Table of
Contents
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit
Committee has appointed KPMG LLP ("KPMG") as our principal
independent registered public accounting firm to perform the audit
of our consolidated financial statements for fiscal 2020. As a
matter of good corporate governance, the Audit Committee has
decided to submit its selection of independent audit firm to
stockholders for ratification. In the event that this appointment
of KPMG is not ratified by a majority of the shares of common stock
present or represented at the Annual Meeting and entitled to vote
on the matter, the Audit Committee will review its future selection
of KPMG as our independent registered public accounting
firm.
The Audit
Committee first approved KPMG as our independent auditors in
September 2002, and KPMG audited our financial statements for
fiscal 2019. Representatives of KPMG are expected to attend the
meeting with the opportunity to make a statement and respond to
appropriate questions from stockholders present at the meeting with
respect to this proposal.
Principal Accountant Fees and Services
We regularly
review the services and fees from our independent registered public
accounting firm, KPMG. These services and fees are also reviewed
with the Audit Committee annually. In accordance with standard
policy, KPMG periodically rotates the individuals who are
responsible for our audit. Our Audit Committee has determined that
the providing of certain non-audit services, as described below, is
compatible with maintaining the independence of KPMG.
In addition to
performing the audit of our consolidated financial statements, KPMG
provided various other services during fiscal years 2019 and 2018.
Our Audit Committee has determined that KPMG's provisioning of
these services, which are described below, does not impair KPMG's
independence from NortonLifeLock. The aggregate fees billed for
fiscal years 2019 and 2018 for each of the following categories of
services are as follows:
|
|
|
|
|
|
|
|
Fees Billed to
NortonLifeLock
|
|
FY19 |
|
FY18 |
|
Audit fees(1)
|
|
$ |
12,464,329 |
|
$ |
11,370,525 |
|
Audit related fees(2)
|
|
|
1,142,383 |
|
|
753,689 |
|
Tax fees(3)
|
|
|
161,685 |
|
|
469,449 |
|
All other fees(4)
|
|
|
0 |
|
|
311,000 |
|
|
|
|
|
|
|
|
|
Total fees
|
|
$ |
13,768,398 |
|
$ |
12,904,663 |
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
The
categories in the above table have the definitions assigned under
Item 9 of Schedule 14A promulgated under the Exchange
Act, and these categories include in particular the following
components:
- (1)
- "Audit fees"
include fees for audit
services principally related to the year-end examination and the
quarterly reviews of our consolidated financial statements,
consultation on matters that arise during a review or audit, review
of SEC filings, audit services performed in connection with our
acquisitions and divestitures and statutory audit fees.
- (2)
- "Audit related fees"
include fees which are
for assurance and related services other than those included in
Audit fees.
- (3)
- "Tax fees"
include fees for tax
compliance and advice.
- (4)
- "All other fees"
include fees for all
other non-audit services, principally for services in relation to
certain information technology audits.
An accounting
firm other than KPMG performs supplemental internal audit services
for NortonLifeLock. Another accounting firm provides the majority
of NortonLifeLock's outside tax services.
Policy on Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services of Independent Registered Public Accounting
Firm
The Audit
Committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent registered public
accounting firm. These services may include audit services,
audit-related services, tax services and other services.
Pre-approval is detailed as to the particular service or category
of services and is generally subject to a specific budget. The
independent registered public accounting firm and management are
required to periodically report to the Audit Committee regarding
the extent of services provided by the independent registered
public accounting firm in accordance with this pre-approval, and
the fees for the services performed to date. The Audit Committee
may also pre-approve particular services on a case-by-case
basis.
All of the
services relating to the fees described in the table above were
approved by the Audit Committee.
THE
BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF
PROPOSAL NO. 2
28
Table of
Contents
PROPOSAL NO. 3
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
In accordance
with Section 14A of the Exchange Act, stockholders are
entitled to cast an advisory vote to approve the compensation of
our named executive officers, as disclosed in this proxy statement.
Accordingly, you are being asked to vote on the following
resolution at the Annual Meeting:
"RESOLVED, that
the compensation paid to NortonLifeLock Inc.'s named executive
officers, as disclosed in this proxy statement pursuant to the
SEC's compensation disclosure rules, including the Compensation
Discussion & Analysis, compensation tables and narrative
discussion, is hereby approved."
As described
more fully in the Compensation Discussion & Analysis
section of this proxy statement, our named executive officers are
compensated in a manner consistent with our pay-for-performance
philosophy and corporate governance best practices. Our executive
compensation programs for fiscal 2019 reflect these significant
changes to our management team and to our business while promoting
our pay-for-performance philosophy and corporate governance best
practices. A few highlights, which are discussed further in the
Compensation Discussion & Analysis, are:

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Component |
|
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|
Metric(1) |
|
|
|
Achievement (as a
percent of target) |
|
|
|
Funding |
|
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|
FY19 Executive
Annual |
|
|
|
FY19 Non-GAAP operating
income |
|
|
|
87.5% |
|
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|
0% |
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|
Incentive Plan
("EAIP") |
|
|
|
FY19 Non-GAAP revenue |
|
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97.2% |
|
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71.2% |
|
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FY19 EAIP Total |
|
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35.6% |
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FY19 Executive
Compensation |
|
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|
FY19
Performance-based |
|
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|
FY19 earnings per share
("EPS") |
|
|
|
88.3% |
|
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50.6% |
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Restricted Stock
Units |
|
|
|
FY19 free cash flow |
|
|
|
90.7% |
|
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91.2% |
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FY18 Performance-based
Restricted Stock Units |
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2-year total shareholder return
("TSR") relative to Nasdaq 100 |
|
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-21.32% |
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0% |
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Fiscal 2017 ('FY17')
Performance-based Restricted Stock Units |
|
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FY18 Non-GAAP Operating
Income |
|
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|
109.29% |
|
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|
268.2% (of which 250% vested and settled
at the end of FY18, and the remaining 18.2% vested for eligible
participants at the end of FY19). |
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(1) Please
see discussion below in Compensation Discussion and Analysis for
more detail regarding how these metrics are calculated.
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We believe that
our compensation program balances the interests of all of our
constituencies — our stockholders, our executive officers, the
remainder of our employee base, our business partners and our
community — by, among other things, focusing on achievement of
corporate objectives, attracting and retaining highly-qualified
executive management and maximizing long-term stockholder value. We
encourage you to read the Compensation Discussion &
Analysis, compensation tables and narrative discussion related to
executive compensation in this proxy statement.
29
Table of
Contents
The vote to
approve the compensation of our named executive officers is
advisory and, therefore, not binding. Although the vote is
non-binding, the Compensation Committee and the Board value your
opinion and will consider the outcome of the vote in establishing
its compensation philosophy and making future compensation
decisions. Our current policy is to hold such an advisory vote each
year, and we expect to hold another advisory vote with respect to
approve to executive compensation at the 2020 annual meeting of
stockholders.
THE
BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF
PROPOSAL NO. 3
30
Table of
Contents
PROPOSAL NO. 4
STOCKHOLDER PROPOSAL REGARDING INDEPENDENT BOARD
CHAIRMAN
Proposal 4 is a
stockholder proposal. If the stockholder proponent, or
representative who is qualified under state law, is present at the
Annual Meeting and submits the proposal for a vote, then the
proposal will be voted upon. The stockholder proposal is included
in this proxy statement exactly as submitted by the stockholder
proponent. The Board's recommendation on the proposal is presented
immediately following the proposal. We will promptly provide you
with the name, address and, to NortonLifeLock's knowledge, the
number of voting securities held by the proponent of the
stockholder proposal, upon receiving a written or oral request
directed to: NortonLifeLock Inc., Attn: Scott C. Taylor,
Corporate Secretary, 60 E. Rio Salado Parkway, Suite 1000,
Tempe, Arizona 85281, telephone: (650) 527-8000.
Proposal 4 — Independent Board Chairman
Shareholders
request our Board of Directors to adopt as policy, and amend our
governing documents as necessary, to require that the Chairman of
the Board be an independent member of the Board whenever possible.
Although it would be better to have an immediate transition to an
independent Board Chairman, the Board would have the discretion to
phase in this policy for the next Chief Executive Officer
transition.
If the Board
determines that a Chairman who was independent when selected is no
longer independent, the Board shall select a new Chairman who
satisfies the requirements of the policy within a reasonable amount
of time. Compliance with this policy is waived in the unlikely
event that no independent director is available and willing to
serve as Chairman.
Shareholders
can vote in favor of this proposal to send a message that they are
not satisfied with NortonLifeLock' s performance.
Shares of
NortonLifeLock fell 22% in May 2019, according to a Motley Fool
article. NortonLifeLock stock sold off in the wake of disappointing
earnings that were combined with the announcement that CEO Greg
Clark had stepped down.
Shares traded
down 15% on the day of the news, marking NortonLifeLock's worst
daily performance in over a year. The company had yet to name a
permanent replacement by early July.
Adjusted
earnings per share for the fourth quarter were $0.39 down
significantly from $0.44 in the prior-year quarter. Adjusted sales
were also lower, dropping 2% year over year to $1.195 billion
and missing the average analyst estimate for sales.
NortonLifeLock
shareholders have had to endure ups and downs tied to the 2018
audit and growth initiatives failing to live up to targets. In
addition to this there was the uninspiring quarterly performance
combined with the unexpected news of Clark's departure that sent
the shares tumbling.
The price of
NortonLifeLock stock was also flat for the 5-years leading up to
July 2019.
This proposal
will cost NortonLifeLock virtually nothing to adopt -yet can create
an important incentive for management to improve company
performance.
Please vote to enhance the oversight of our CEO:
Independent Board Chairman — Proposal 4
Our
Board of Directors' Statement in Opposition to Proposal
4
NortonLifeLock's
Board of Directors unanimously recommends a vote "AGAINST" the
stockholder proposal.
The Board has
considered the stockholder proposal and, for the reasons described
below, believes that the proposal is not in the best interests of
NortonLifeLock and its stockholders.
For nearly seven years, NortonLifeLock has had an
independent Chairman of the Board who has provided strong
independent oversight during the Company's most transformative
events.
Since January
2013, Daniel H. Schulman, one of our independent directors, has
served as non-executive Chairman of the Board. Prior to that, he
served as Lead Independent Director from July 2012 to December 2012
while our prior non-executive Chairman of the Board was
transitioning into the CEO role. Mr. Schulman has demonstrated
strong leadership, independent thinking and a deep understanding of
our business as a result of his tenure as an independent director
since March 2000. Since being appointed as the Chairman of the
Board, Mr. Schulman has worked with the rest of the Board to
oversee multiple significant strategic and leadership changes at
the Company, including the transformative divestiture of
31
Table of
Contents
Veritas and acquisitions of Blue Coat and LifeLock. Although
Mr. Schulman is not standing for re-election at the Annual
Meeting, our board intends to nominate an independent member of our
Board to serve as our non-executive Chairman of the Board effective
as of the Annual Meeting.
While our Board's longstanding Board leadership
structure reflects separation in the roles of Chairman and CEO, the
Board believes that it should ultimately have the flexibility to
tailor its Board leadership structure to fit NortonLifeLock's
changing needs.
As discussed
above under "Board Leadership Structure," our Board retains the
flexibility to determine on a case-by-case basis whether the Chief
Executive Officer, or an independent director, should serve as
Chairman. Our Board believes that it should retain the ability to
choose the person best suited for the role at a particular time in
accordance with its fiduciary duty to act in the best interests of
the Company and stockholders as circumstances warrant. This
flexibility has been important to our Board from time to time in
the past and has increased importance today, as the Company is
conducting a search for a permanent CEO while at the same time
undergoing a major transition with the divestiture of its
enterprise security business.
Our Board's
decisions in connection with the appointment of Mr. Schulman
as our Lead Independent Director and subsequent appointment as our
Chairman illustrate why our Board should retain flexibility to
appoint the best person for the role. He was appointed to the
position of non-executive Chairman after our prior non-executive
Chairman served as both Chairman and CEO for six months in
connection with a prior CEO transition. At that time, our Board
believed appointing Mr. Schulman Lead Independent Director
while Mr. Schulman's predecessor served as Chairman and CEO
was in the best interest of our Company and stockholders since it
provided independent Board leadership while providing the benefit
of having our CEO chair regular Board meetings as our Board and CEO
developed NortonLifeLock's new strategy and addressed the key
business and strategic issues at that time. Following the initial
phase of CEO transition, NortonLifeLock entered a new phase and the
Board determined that Mr. Schulman's extensive management
experience and deep knowledge of our company made him best-suited
to lead our Board and provide independent oversight of our senior
management team while our CEO focused on executing our new
strategic plan and managing our operations and
performance.
The Board
believes that this flexibility benefits NortonLifeLock and our
stockholders because the Board is in the best position to determine
its leadership structure given its knowledge of NortonLifeLock's
leadership team, strategic goals, opportunities and challenges.
Additionally, our Board believes limiting the Board's ability to
determine the appropriate Board leadership structure could be
harmful to NortonLifeLock's long-term prospects as our Board is
currently conducting a CEO search and may decide our next CEO
should also serve as our Chairman. We cannot rule out the
possibility that our next CEO will also serve as Chairman as it
does not serve the interests of the Company or its stockholders to
limit the pool of CEO candidates based on this factor
alone.
Importantly,
regardless of what leadership structure the Board may determine to
adopt in the future, our Corporate Governance Guidelines provide
for appointment of a Lead Independent Director in situations where
the Chairman of the Board is not independent. The Board commitment
to independent Board oversight at all times does not end there. All
the members of the Board of Directors, other than the CEO, are
independent. All the committees of the Board of Directors are
composed entirely of independent directors. The Board also has been
significantly refreshed as five of the six independent directors
standing for election at the annual meeting have served since 2016
or later. Our Board believes that eliminating flexibility in the
structure of Board leadership as facts and circumstances require,
as the proponent requests, is unnecessary given the safeguards on
Board independence already in place and could adversely impact our
Company's ability to adapt to new challenges and attract suitable
CEO candidates.
Our corporate governance policies and practices
further promote effective, independent Board
oversight.
In addition to
having an independent Chairman of the Board, our Board has adopted
policies and practices that provide our stockholders with
meaningful rights and further promote Board independence and
effective oversight of management.
As mentioned
above, all members of our Board (other than any person serving on
our Board who also serves as our CEO) and its committees are
independent and our Board has been substantially refreshed in
recent years. Additionally, if our Chairman is not independent in
the future, the independent Directors of the Board will appoint a
Lead Independent Director who will have well-defined powers and
duties. Our Corporate Governance Guidelines require that our key
Board committees be composed entirely of independent directors and
that the independent directors meet in executive session without
the presence of management for a portion of each regularly
scheduled meeting of the Board.
To ensure our
Board remains robust and engaged, we engage in an annual
self-evaluation process to determine whether the Board and its
committees are functioning effectively. Our Nominating and
Governance Committee also annually evaluates each individual
director and recommends to our Board whether each Director should
be nominated for election to a
32
Table of
Contents
further one-year term. When nominated, our Directors are
elected annually, with a majority voting standard for uncontested
elections and a director resignation policy.
Stockholders
have meaningful proxy access and special meeting rights. We have no
supermajority voting provisions. As evidenced by our discussions
with stockholders representing approximately 55% of our outstanding
shares in 2019, we are deeply committed to ongoing engagement with
our stockholders to gain valuable insight into the issues that
matter most to them and to enable our Company to address them
effectively. We also enable increased stockholder attendance and
participation by utilizing a virtual meeting format for our annual
meetings of stockholders.
Vote Required
This Proposal
No. 4 is advisory in nature and would constitute a
recommendation to our Board if it is approved by stockholders. The
affirmative vote of a majority of the stock having voting power
present in person or represented by proxy and entitled to vote is
required to approve this Proposal No. 4. Unless you indicate
otherwise, your proxy will be voted "AGAINST" this
proposal.
For the
foregoing reasons, the Board unanimously believes that this
proposal is not in the best interests of NortonLifeLock or our
stockholders, and recommends that you vote "AGAINST" Proposal
4.
THE
BOARD RECOMMENDS A VOTE "AGAINST" PROPOSAL NO.
4.
PROXIES RECEIVED BY THE COMPANY WILL BE VOTED
"AGAINST"
THIS PROPOSAL UNLESS OTHERWISE INSTRUCTED.
33
Table of
Contents
OUR EXECUTIVE OFFICERS
The names of
our current executive officers, their ages as of October 25,
2019 and their positions, after giving effect to the appointment of
Mr. Pilette as our CEO, Mr. Kapuria as our President and
Mr. Brown as our Interim Chief Financial Officer as of
November 8, 2019, are shown below.
|
|
|
|
|
|
Name
|
|
Age |
|
Position
|
Vincent
Pilette |
|
|
47 |
|
CEO |
Matthew
Brown |
|
|
39 |
|
Interim Chief Financial Officer |
Amy L.
Cappellanti-Wolf |
|
|
54 |
|
Senior Vice President and Chief Human Resources
Officer |
Samir
Kapuria |
|
|
46 |
|
President |
Scott C.
Taylor |
|
|
55 |
|
Executive Vice President, General Counsel and
Secretary |
The Board
chooses executive officers, who then serve at the Board's
discretion. There is no family relationship between any of the
directors or executive officers and any other director or executive
officer of NortonLifeLock.
For information
regarding Mr. Pilette, please refer to Proposal No. 1,
"Election of
Directors" above.
Mr. Brown
has been appointed to serve as our Interim Chief
Financial Officer, effective November 8, 2019. From January
2019 to November 2019, he served as our Vice President of Finance
and Chief Accounting Officer. Prior to that, he served as our Vice
President, Finance from August 2016 to January 2019 and as Vice
President, Corporate Controller of Blue Coat, Inc. from
October 2015 until we acquired that company in August 2016.
Previously, he served in various positions at NETGEAR, Inc., a
computer networking hardware company, from 2010 to October 2015,
most recently as Senior Director, Assistant Controller.
Mr. Brown holds a Bachelor of Science degree in business
administration from the Walter A. Haas School of Business at U.C.
Berkeley.
Ms. Cappellanti-Wolf
has served as our Senior Vice President and Chief
Human Resources Officer since July 2014. Prior to joining us, she
served as Chief Human Resources Officer at Silver Spring
Networks, Inc., a smart grid products provider, from June 2009
to July 2014. From September 2001 to June 2009,
Ms. Cappellanti-Wolf served as Vice President, Human Resources
of Cisco Systems, Inc. From 2000 to 2001, she served as a
Human Resources Director at Sun Microsystems, Inc.
Ms. Cappellanti-Wolf served as Human Resources Director for
The Walt Disney Company from 1995 to 2000 and held various roles in
human resources with Frito-Lay, Inc., a division of
PepsiCo, Inc., from 1988 to 1995. She has a Bachelor's degree
in journalism from West Virginia University and a Master's degree
in industrial and labor relations from West Virginia
University.
Mr. Kapuria
has been appointed to serve as our President,
effective November 8, 2019. From May 2018 to November 2019, he
served as our Executive Vice President, Consumer Business Unit and
Cyber Security Services. Prior to that, he served as our Senior
Vice President and General Manager, Cyber Security Services from
November 2014 to May 2018, as our Vice President, Products and
Services from July 2012 to November 2014, and as our Vice
President, Business Strategy and Security Intelligence from April
2011 to July 2012. From October 2004 to April 2011,
Mr. Kapuria held numerous other director-level management
positions with NortonLifeLock. Mr. Kapuria holds a Bachelor's
degree in finance from the University of Massachusetts.
Mr. Taylor
has served as or Executive Vice President, General
Counsel and Secretary since August 2008. From February 2007 to
August 2008, he served as our Vice President, Legal. Prior to
joining NortonLifeLock, Mr. Taylor held various legal and
administrative positions at Phoenix Technologies Ltd., a
provider of core systems software, from January 2002 to February
2007, including most recently as Chief Administrative Officer,
Senior Vice President and General Counsel. From May 2000 to
September 2001, he was Vice President and General Counsel at
Narus, Inc., a venture-backed private company that designs IP
network management software. Mr. Taylor is a director of Piper
Jaffray Companies, a national advisory board member of the Stanford
University Center for Comparative Studies on Race and Ethnicity and
serves on the board of trustees of Menlo School. He holds a Juris
Doctorate from George Washington University and a Bachelor's degree
from Stanford University.
34
Table of
Contents
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following
table sets forth information, as of October 25, 2019 with
respect to the beneficial ownership of NortonLifeLock common stock
by (i) each stockholder known by NortonLifeLock to be the
beneficial owner of more than 5% of NortonLifeLock common stock,
(ii) each current member of the Board or director nominee,
(iii) the named executive officers of NortonLifeLock included
in the Summary Compensation Table appearing on page 60 of this
Proxy Statement and (iv) all current executive officers and
directors of NortonLifeLock as a group.
Beneficial
ownership is determined under the rules of the SEC and generally
includes voting or investment power with respect to securities.
Unless otherwise indicated below, the persons and entities named in
the table have sole voting and sole investment power with respect
to all shares beneficially owned, subject to community property
laws where applicable. Percentage ownership is based on 622,918,522
shares of NortonLifeLock common stock outstanding as of
October 25, 2019. Shares of common stock subject to stock
options and restricted stock units vesting on or before
December 24, 2019 (within 60 days of October 25,
2019) are deemed to be outstanding and beneficially owned for
purposes of computing the percentage ownership of such person but
are not treated as outstanding for purposes of computing the
percentage ownership of others.
Unless
otherwise indicated, the address of each of the individuals and
entities named below is c/o NortonLifeLock Inc., 60 E. Rio
Salado Parkway, Suite 1000, Tempe, Arizona 85281.
|
|
|
|
|
|
|
|
Name and Address of
Beneficial Owner
|
|
Amount and
Nature of
Beneficial
Ownership |
|
Percent
of Class |
|
5% Beneficial Owners
|
|
|
|
|
|
|
|
Vanguard Group Inc.(1)
|
|
|
66,828,879 |
|
|
10.7 |
% |
T. Rowe Price
Associates, Inc.(2)
|
|
|
51,293,114 |
|
|
8.2 |
% |
Starboard Value LP(3)
|
|
|
43,600,796 |
|
|
7.0 |
% |
BlackRock, Inc.(4)
|
|
|
42,309,498 |
|
|
6.8 |
% |
Capital World Investors(5)
|
|
|
41,378,550 |
|
|
6.6 |
% |
|
|
|
|
|
|
|
|
Total
|
|
|
245,410,837 |
|
|
39.3 |
% |
Directors and
Named Executive Officers
|
|
|
|
|
|
|
|
Gregory S. Clark *(6)
|
|
|
5,964,117 |
|
|
1.0 |
% |
Nicholas R. Noviello *(7)
|
|
|
1,347,260 |
|
|
** |
|
Vincent Pilette(8)
|
|
|
785,906 |
|
|
** |
|
Scott C. Taylor
|
|
|
408,724 |
|
|
** |
|
Amy L. Cappellanti-Wolf
|
|
|
218,251 |
|
|
** |
|
David L. Mahoney(9)
|
|
|
201,423 |
|
|
** |
|
Samir Kapuria(10)
|
|
|
191,579 |
|
|
** |
|
Daniel H. Schulman
|
|
|
170,989 |
|
|
** |
|
Frank E. Dangeard
|
|
|
113,936 |
|
|
** |
|
V. Paul Unruh(11)
|
|
|
101,711 |
|
|
** |
|
Anita M. Sands
|
|
|
63,830 |
|
|
** |
|
Kenneth Y. Hao(12)
|
|
|
60,670 |
|
|
** |
|
David W. Humphrey
|
|
|
49,882 |
|
|
** |
|
Dale L. Fuller
|
|
|
35,088 |
|
|
** |
|
Suzanne M. Vautrinot(13)
|
|
|
32,269 |
|
|
** |
|
Richard S. Hill(14)
|
|
|
32,072 |
|
|
** |
|
Peter A. Feld(15)
|
|
|
24,685 |
|
|
** |
|
Susan P. Barsamian(16)
|
|
|
19,903 |
|
|
** |
|
|
|
|
|
|
|
|
|
Total
|
|
|
9,822,295 |
|
|
1.6 |
% |
Current
Directors and Executive Officers
|
|
|
|
|
|
|
|
As a group (18 people)(17)
|
|
|
2,542,151 |
|
|
0.4 |
% |
- *
- Former officer.
- **
- Less than 1%.
35
Table of
Contents
- (1)
- Based solely on a
Schedule 13G/A filing made by The Vanguard Group on
February 13, 2019, The Vanguard Group has sole voting power
over 736,173 shares, shared voting power over 135,657 shares, sole
dispositive power over 65,971,054shares and shared dispositive
power over 857,825 shares. This stockholder's address is 100
Vanguard Blvd., Malvern, PA 19355.
- (2)
- Based solely on a
Schedule 13G/A filing made by T. Rowe Price Associates on
October 10, 2019, T. Rowe Price Associates, Inc. has sole
voting over 18,962,995 shares and sole dispositive power over
51,293,114 shares. This stockholder's address is 100 E. Pratt
Street, Baltimore, MD 21202
- (3)
- Based solely on a
Schedule 13D/A filing made by Starboard Value LP on
August 15, 2019, Starboard Value LP has sole voting and
sole dispositive power over 43,600,796 shares. This stockholder's
address is 777 Third Avenue, 18th Floor,
New York, New York 10017. Mr. Feld is a Managing Member of
Starboard Value LP and may be deemed to share voting and
dispositive power over these shares.
- (4)
- Based solely on a
Schedule 13G/A filing made by the BlackRock, Inc. on
February 6, 2019, BlackRock, Inc. has sole voting power
over 37,349,816 and sole dispositive power over 42,309,498 shares.
This stockholder's address is 55 East 52nd Street,
New York, NY 10055.
- (5)
- Based solely on a
Schedule 13G/A filing made by Capital World Investors on
February 14, 2019, Capital World Investors has sole voting
power over 41,358,274 shares and sole dispositive power over
41,378,550 shares. This stockholder's address is 333 South Hope
Street, Los Angeles, CA 90071.
- (6)
- Beneficial ownership data is
current through Mr. Clark's departure date of May 9, 2019
and includes 1,122,938 shares held by the Gregory S. Clark Living
Trust for which Mr. Clark exercises voting and dispositive
power and 3,604,101 shares subject to options that were fully
exercisable as of his departure date.
- (7)
- Beneficial ownership data is
current through Mr. Noviello's departure date of May 24,
2019 and includes 775,028 shares subject to options that were fully
exercisable as of his departure date.
- (8)
- Includes 165,429 shares held by
Vincent Pilette and 620,477 shares held by the VPJW Revocable Trust
for which Mr. Pilette exercises voting and dispositive
power.
- (9)
- Includes 16,959 shares held by the
Winnifred C. Ellis & David L. Mahoney Trust for which
Mr. Mahoney exercises voting and dispositive power.
- (10)
- Includes 4,844 shares issuable
upon the settlement of RSUs as of December 1, 2019.
- (11)
- Shares held by the Unruh Family
Living Trust for which Mr. Unruh exercises voting and
dispositive power.
- (12)
- These securities are held by
Mr. Hao for the benefit of Silver Lake Technology
Management LLC, certain of its affiliates and certain of the
funds they manage ("Silver Lake") and pursuant to Mr. Hao's
arrangement with Silver Lake, upon the sale of these securities,
the proceeds are expected to be remitted to Silver Lake.
- (13)
- Shares held by the William C.
Keller and Suzanne Vautrinot Living Trust for which
Ms. Vautrinot exercises voting and dispositive power.
- (14)
- Includes 3,953 shares issuable
upon the settlement of RSUs as of November 1, 2019 and 3,953
shares as of December 1, 2019.
- (15)
- Excludes 43,600,796 shares of
common stock beneficially owned by Starboard Value LP and its
affiliates. Mr. Feld is a Managing Member of Starboard
Value LP and may be deemed to share voting and dispositive
power over these shares.
- (16)
- Shares held by the S. Barsamian
and W. Romans Revocable Trust for which Ms. Barsamian
exercises voting and dispositive power.
- (17)
- Includes for Matthew C. Brown:
14,134 shares, 2,099 shares subject to RSUs that will vest on
December 1, 2019, and 15,000 shares subject to fully
exercisable options.
NortonLifeLock
has adopted a policy that executive officers and members of the
Board hold an equity stake in the Company. The policy requires each
executive officer to hold a minimum number of shares of
NortonLifeLock common stock. Newly appointed executive officers are
not required to immediately establish their position but are
expected to make regular progress to achieve it. The Nominating and
Governance Committee reviews the minimum number of shares held by
the executive officers and directors from time to time. The purpose
of the policy is to more directly align the interests of our
executive officers and directors with our stockholders. See "Stock
Ownership Requirements" under the Compensation
Discussion & Analysis section for a description of the
stock ownership requirements applicable to our executive
officers.
Delinquent Section 16(a) Reports
Section 16
of the Exchange Act requires NortonLifeLock's directors, executive
officers and any persons who own more than 10% of NortonLifeLock's
common stock, to file initial reports of ownership and reports of
changes in ownership with the SEC. Such persons are required by SEC
regulation to furnish NortonLifeLock with copies of all
Section 16(a) forms that they file.
Based solely on
its review of the copies of such forms furnished to NortonLifeLock
and written representations from the directors and executive
officers, NortonLifeLock believes that all of its executive
officers and directors filed the required reports on a timely basis
under Section 16(a), except for (i) Mr. Schulman who
did not timely report on a Form 4, the distribution of shares
held by DHS 2017 Annuity Trust Agreement II (for which
Mr. Schulman exercises voting and dispositive power) to his
individual account on April 19, 2019, which transaction was
reported on a Form 5 that was filed on May 10, 2019, and
(ii) Mr. Brown, who inadvertently omitted ownership of
5,393 shares of common stock on a Form 3 that was filed on
February 7, 2019, which was subsequently amended on
March 8, 2019 to include the correct number of
shares.
36
Table of
Contents
EXECUTIVE COMPENSATION AND RELATED
INFORMATION
COMPENSATION DISCUSSION & ANALYSIS
(CD&A)
This
compensation discussion and analysis ("CD&A") summarizes our
executive compensation philosophy, our fiscal 2019 ("FY19")
executive compensation program and the FY19 compensation decisions
made by the Compensation Leadership and Development Committee (the
"Compensation Committee") with respect to the following named
executive officers ("NEOs"):
- •
- Gregory S. Clark, Former President
and Chief Executive Officer ("CEO");
- •
- Nicholas R. Noviello, Former
Executive Vice President and Chief Financial Officer
("CFO");
- •
- Amy L. Cappellanti-Wolf, Senior
Vice President and Chief Human Resources Officer;
- •
- Samir Kapuria, President
(effective November 8, 2019); and
- •
- Scott C. Taylor, Executive Vice
President, General Counsel and Secretary.
37
Table of
Contents
FY19 Financial Results, Compensation and New
Leadership
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except for per share amounts) |
|
|
|
Fiscal 2019
("FY19") |
|
|
|
Fiscal 2018
("FY18") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
|
|
$4,731 |
|
|
|
$4,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY19 Financial
Results |
|
|
|
|
|
Operating income |
|
|
|
380 |
|
|
|
49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
31 |
|
|
|
1,138 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share —
diluted |
|
|
|
0.05 |
|
|
|
1.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities |
|
|
|
1,495 |
|
|
|
950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY19 Challenges |
|
|
|
While we saw improvements in some areas of our business, our
overall performance and stock price was negatively impacted by
several significant factors:
•
Revenue and business momentum in
our former Enterprise Security segment declined in FY19.
•
The Company was subject to an
internal investigation, which was commenced and completed by the
Audit Committee of the Board (the "Audit Committee") in connection
with concerns raised by a former employee.
•
We announced a restructuring plan
pursuant to which we targeted reductions of our global workforce of
up to approximately 8%.
•
Our executive leadership team was
in transition with announced executive officer departures in
November 2018 and January 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitment to
Pay-For-Performance |
|
|
|
•
Mr. Clark, our former CEO,
did not receive a FY19 equity award.
•
None of our NEOs received an
annual base salary increase for FY19, except for those executives
who were promoted.
•
Our former CEO did not receive a
payment under his annual cash incentive award.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Component |
|
|
|
Metric(1) |
|
|
|
Achievement (as a
percent of target) |
|
|
|
Funding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY19 Executive
Annual |
|
|
|
FY19 Non-GAAP operating
income |
|
|
|
87.5% |
|
|
|
0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
("EAIP") |
|
|
|
FY19 Non-GAAP revenue |
|
|
|
97.2% |
|
|
|
71.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
FY19 EAIP Total |
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|
|
|
|
|
|
|
|
35.6% |
|
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|
|
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|
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|
|
FY19 Executive
Compensation |
|
|
|
|
|
FY19
Performance-based |
|
|
|
FY19 earnings per share
("EPS") |
|
|
|
88.3% |
|
|
|
50.6% |
|
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|
|
Restricted Stock
Units |
|
|
|
FY19 free cash flow |
|
|
|
90.7% |
|
|
|
91.2% |
|
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|
|
FY18 Performance-based
Restricted Stock Units |
|
|
|
2-year total shareholder return
("TSR") relative to Nasdaq 100 |
|
|
|
-21.32% |
|
|
|
0% |
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|
Fiscal 2017 ("FY17")
Performance-based Restricted Stock Units |
|
|
|
FY18 Non-GAAP Operating
Income |
|
|
|
109.29% |
|
|
|
268.2% (of which 250% vested and settled
at the end of FY18, and the remaining 18.2% vested for eligible
participants at the end of FY19). |
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(1) Please
see discussion below for more detail regarding how these metrics
are calculated.
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New Leadership |
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|
•
The composition of our Board
changed materially with the appointment of four new independent
directors, two of whom replaced long-tenured directors, and with
the further changes reflected herein to occur at the Annual
Meeting.
•
In November 2018, Michael Fey
resigned as President and COO.
•
In May 2019, Richard S.
"Rick" Hill became our Interim President and CEO, replacing
Gregory S. Clark.
•
In May 2019, Vincent Pilette
became our CFO, replacing Nicholas R. Noviello.
•
In November 2019, Mr. Pilette
was named our permanent CEO and Samir Kapuria became our President,
replacing our interim President and CEO, Mr. Hill.
•
In November 2019, Matthew Brown
became our interim CFO.
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38
Table of
Contents
Despite the
challenges we faced in FY19, we remain confident in our business
strategies and our competitive product portfolio. We will continue
to execute on multiple initiatives to drive revenue growth. With
industry-leading solutions, we believe that we are well positioned
to participate in a growing opportunity in the cyber defense
market. We have an opportunity to enhance stockholder value by
building on the leadership and momentum of our business.
Our Compensation Philosophy and Practices
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Drive Business Success
Our executive compensation program is designed to drive our
success as a market leader in cybersecurity.
|
|
Pay for Performance
We believe that executive compensation should be tied to our
short and long-term performance. It is important to reward
outstanding individual performance, team success, and Company-wide
results.
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|
Attract and Retain
We focus on corporate and individual performance objectives and
aim to attract and retain highly-qualified executive officers while
maximizing long-term stockholder value.
|
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Balancing and Aligning Interests with Stockholders
We are sensitive to our need to balance and align the interests
of our executive officers with those of our stockholders,
especially when compensation decisions might increase our cost
structure or stockholder dilution.
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39
Table of
Contents
Compensation Policies and Practices
Strong stockholder support on say-on-pay and Stockholder
Engagement
At our 2018
annual meeting of stockholders, we requested that our stockholders
cast a non-binding advisory vote on the compensation of our NEOs,
also known as "say-on-pay" vote. This proposal passed with
approximately 90% of the votes cast in favor. In evaluating our
compensation practices in FY19, the Compensation Committee was
mindful of the support our stockholders expressed for our
philosophy of linking compensation to financial objectives and the
enhancement of stockholder value. In addition, management met with
or spoke to institutional stockholders representing approximately
55% of outstanding shares and listened to any feedback regarding
executive compensation program. As a result, the Compensation
Committee retained its general approach to executive compensation
and continued to apply the same general philosophy and objectives
as in the prior fiscal year in determining executive
compensation.
40
Table of
Contents
FY19 EXECUTIVE COMPENSATION
The total mix
of our NEO compensation, including the portion at risk, is
reflected in the graphs below. The major components of target
compensation for our NEOs during FY19 were: (i) base salary,
(ii) target annual incentive awards and (iii) grant date
fair value of long-term equity incentive awards, with the exception
of our CEO who did not receive any equity awards for
FY19.

Analysis of Compensation Components
The elements of
the FY19 compensation for our NEOs was as follows:
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|
|
Compensation Component |
|
Form of Award |
|
Percent at Risk |
|
Performance vs
Time-Based |
|
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|
|
|
|
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|
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|
|
|
|
Base
Salary |
|
Cash |
|
|
0 |
% |
|
NA |
|
|
|
|
Executive Annual Incentive Plan |
|
Cash(1) |
|
|
100 |
% |
|
Performance-Based |
|
|
|
|
Equity Incentive Awards — Restricted Stock Units
("RSUs") |
|
RSUs(2) |
|
|
100 |
% |
|
Time-Based |
|
|
|
|
Equity Incentive Awards — Performance-based Restricted
Stock Units ("PRUs") |
|
PRUs(2) |
|
|
100 |
% |
|
Performance-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- For FY19, except for
Mr. Noviello, this award was payable in RSUs, which were
granted on May 20, 2019 and vested June 1, 2019.
Beginning in fiscal 2020 ("FY20"), the award will be payable in
cash.
- (2)
- For FY19, our former CEO did not
receive any equity awards.
I. Base Salary
|
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|
|
2019 Base
Salary |
|
|
|
|
|
|
|
|
|
|
|
|
|
Philosophy |
|
Considerations |
|
|
|
|
|
|
|
|
|
|
|
•
Provide fixed compensation to attract and retain key
executives.
|
|
•
Salary reviewed and set annually.
•
The factors used to determine the amount of salaries include
skill set, experience performance contribution levels, the
executive officer's role, positioning relative to peer group and
market and our overall salary budget.
•
Recommendations of the CEO for other executive officers based
upon his annual review of performance.
|
|
|
|
|
|
|
|
|
|
41
Table of
Contents
The following
table presents each NEO's base salary for FY19.
|
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|
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|
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|
|
|
|
|
|
NEO
|
|
|
FY18
Annual Salary ($)
|
|
|
Change in
Salary (%)
|
|
|
FY19
Annual Salary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory S. Clark
|
|
|
1,000,000 |
|
|
— |
|
|
1,000,000 |
|
|
|
|
Nicholas R. Noviello
|
|
|
650,000 |
|
|
— |
|
|
650,000 |
|
|
|
|
Amy L. Cappellanti-Wolf
|
|
|
440,000 |
|
|
— |
|
|
440,000 |
|
|
|
|
Samir Kapuria(1)
|
|
|
390,000 |
(1) |
|
60,000 |
(1) |
|
450,000 |
|
|
|
|
Scott C. Taylor
|
|
|
600,000 |
|
|
— |
|
|
600,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Mr. Kapuria was named an
executive officer during FY19 and received a salary increase in
connection with his promotion. His salary increased from $390,000
to $440,000 effective May 8, 2018.
As presented in
the table above, our named executive officers did not receive an
increase in annual base salary other than in connection with a
promotion for Mr. Kapuria. Our former CEO determined that none
of our other NEOs would receive a base salary increase for FY19. In
addition, our Board also determined that Mr. Clark would not
receive a salary increase in FY19.
II. Executive Annual Incentive Plan
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
FY19 Annual Cash Incentive Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philosophy |
|
Target Amount Considerations |
|
Award Design Considerations |
|
Performance Conditions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
Establish appropriate short-term performance measures that the
Compensation Committee believes will drive our future growth and
profitability.
•
Reward achievement of short-term performance
measures.
•
Payout tied to Company performance consistent with FY19
financial plan.
•
Offer market competitive incentive opportunities.
|
|
•
Factors used to determine target amounts included:
(i) relevant market data; (ii) internal pay equity; and
(iii) desired market position role of each NEO.
|
|
•
Non-GAAP Operating Income and Non-GAAP Revenue were the
financial metrics selected because we believe: (i) they
strongly correlate with stockholder value creation, are transparent
to investors and are calculated on the same basis as described in
our quarterly earnings releases and supplemental materials, and
balance growth and profitability, and (ii) our executive team
can have a direct impact on these metrics through skillful
management and oversight.
•
Metrics established based on a range of inputs, including
external market economic conditions, growth outlooks for our
product portfolio, the competitive environment, our internal
budgets and market expectations.
|
|
•
Non-GAAP Operating Income Metric (50% weighing). Non-GAAP
Operating Income is defined as GAAP operating income, adjusted, as
applicable, to exclude, among other things, stock-based
compensation expense, charges related to the amortization of
intangible assets, restructuring, separation, transition and other
related expenses and contract liabilities fair value adjustment,
calculated under 2019 plan exchange rates
•
Non-GAAP Revenue Metric (50% weighing). Non-GAAP Revenue is
defined as GAAP revenue adjusted to exclude contract liabilities
fair value adjustment calculated under 2019 plan exchange
rates.
|
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|
|
|
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|
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|
42
Table of
Contents
|
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|
|
|
|
FY19 Annual Cash Incentive Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philosophy |
|
Target Amount Considerations |
|
Award Design Considerations |
|
Performance Conditions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
Performance payout curves set to drive increased revenue and
operating income and in accordance with our FY19 financial
plan.
•
Goals established in first 90 days when performance is
indeterminable.
•
Payable in fully vested RSUs for FY19.
•
CEO performance should be completely tied to Company financial
performance.
|
|
•
Individual performance assessment modifier (0-140%) except for
CEO.
•
Employment through payout date.
•
See below for more information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Annual Incentive Plan Target Opportunities:
The following table presents each NEO's target
incentive opportunity for FY19 under the FY19 Executive Annual
Incentive Plan (the "FY19 EAIP"):
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
NEO
|
|
FY19 Individual
Annual
Incentive Target (%)
|
|
FY19
Target ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory S. Clark
|
|
|
150 |
|
|
1,500,000 |
|
|
|
|
Nicholas R. Noviello
|
|
|
100 |
|
|
650,000 |
|
|
|
|
Amy L. Cappellanti-Wolf
|
|
|
70 |
|
|
308,000 |
|
|
|
|
Samir Kapuria(1)
|
|
|
100 |
|
|
450,000 |
|
|
|
|
Scott C. Taylor
|
|
|
100 |
|
|
600,000 |
|
|
|
|
|
|
|
|
|
|
|
- (1)
- In connection with
Mr. Kapuria's promotion, his FY19 Individual Annual Incentive
Target under the FY19 EAIP increased from 60% to 100% effective
May 8, 2018. Mr. Kapuria's prorated target annual
incentive value for FY19 is $427,451.
FY19
EAIP Payout Formula: The
determination of each NEO's payout amount under the FY19 EAIP is
based on the following formula. The Compensation Committee has
discretion to adjust individual awards downward as appropriate by
up to 25% of the amount of the incentive award that would otherwise
be earned.

The payout
curves for each of our metrics for FY19 are set forth in the table
below. The non-GAAP operating income and non-GAAP revenue metrics
are funded independently of each other and are weighted equally.
Except for our CEO, the actual
43
Table of
Contents
individual payouts could be further modified based on an
individual performance factor generally in the range of 0% to 140%
based on performance achievement against pre-established individual
goals for FY19.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
Non-GAAP Operating
Income Metric
|
|
|
|
Non-GAAP Revenue
Metric
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Non-GAAP
Operating Income
($ millions) |
|
Funding
(%) |
|
|
|
Non-GAAP
Revenue
($ millions) |
|
Funding
(%) |
|
|
|
Individual
Performance
Modifier (%) |
|
Total Payout
as a Percentage
of Target (%) |
|
|
Threshold
|
|
|
|
|
$ |
1,428 |
|
|
|
40 |
|
|
|
|
|
$ |
4,760 |
|
|
|
40 |
|
|
|
|
|
35 |
|
|
|
14 |
|
|
|
Target
|
|
|
|
|
$ |
1,630 |
|
|
|
100 |
|
|
|
|
|
$ |
4,943 |
|
|
|
100 |
|
|
|
|
|
100 |
|
|
|
100 |
|
|
|
Maximum
|
|
|
|
|
$ |
1,793 |
|
|
|
200 |
|
|
|
|
|
$ |
5,141 |
|
|
|
200 |
|
|
|
|
|
140 |
|
|
|
280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Performance Assessment
Individual
performance is evaluated, and taken into account in determining the
FY19 EAIP payout for NEOs other than the CEO based on both
quantitative and qualitative results in the following key
areas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Performance Assessment
Components |
|
|
|
|
|
|
|
|
|
|
|
•
Financial and operational goals for the executive's area of
responsibility and the entire Company.
•
Leadership qualities as well as functional competencies and
knowledge for the executive's area of responsibility.
|
|
•
Development and management of the executive's team of
employees.
|
|
|
|
|
|
|
|
|
|
Provided the
threshold performance levels for both Company performance metrics
are achieved, the CEO evaluates the level of each NEO's individual
performance against the pre-determined goals at fiscal year-end and
makes a recommendation to the Compensation Committee. The
Compensation Committee makes the final determination with respect
to each NEO's actual payout, which it did for our NEOs in
FY19.
FY19 EAIP Payout Results:
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|
|
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|
|
Weighted Average Company Performance
Funding
|
|
|
|
|
|
|
|
|
|
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|
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|
Company Performance Metric
|
|
|
Target ($)
(millions)
|
|
|
Threshold ($)
(millions)
|
|
|
Actual ($)
(millions)
|
|
|
Threshold
Funding (%)
|
|
|
Funding (%)
|
|
|
|